Muslim consumers loyal to CSR-driven brands

Muslim consumers in Saudi Arabia, Indonesia, Malaysia and Egypt placed Nestle, Lipton and Kraft among the top five Muslim-friendly brands, while banks and insurance firms came at the bottom, according to Noor Brand Index.

The index is part of a market research titled 'Brands, Islam and the New Muslim Consumer', which was released at the launch of an Islamic consultancy unit of Ogilvy & Mather, Ogilvy Noor, in Malaysia last week. The unit is set to be officially launched in the Middle East in September.

According to the survey, Muslim consumers who comprise a large untapped market of 1.8 billion perceive brands based not only on whether they are halal or not, but also on ethical grounds, mainly their corporate social responsibility.

Tanya Dernaika, Strategic Planning Director, Memac Ogilvy & Mather, said: "Having an Islamic consultancy is important because a lot of the multinationals still do not know much about Islam." Muslim consumers aspire to be perceived as modern without having to be Westernised, Dernaika said. "Around 65 per cent of the respondents said they took pride in being Muslims, but Muslim consumers want to prove they can integrate faith into their modern lifestyle."

Ogilvy Noor offers consultancy, workshops and general expertise regarding brand repositioning, renaming, re-packaging, devising CSR (corporate social responsibility) programmes, seeking customer service offering as well as endorsements.

You have been planning this study for the past two years. Are there any changes in the consumer trends since then?

We have been planning the research for two years, designing it and thinking about the questions we want to ask, and planning the unit itself in terms of offerings and services, in addition to putting together the website and the team. Our main interest was in finding out how important faith is in influencing the process of decision making when it comes to consumption of brands.

The research took six months. It is our launch pad for this unit, providing us with as much data and insight to help us and help our clients as possible.

Things change on a daily basis, depending on various factors that affect the mindset. What we are trying to do is to look at universal trends and big macro shifts in consumption behaviour and in attitude to brands which are less likely to change drastically every month. The trend shifts are going to be in how Muslims consume media.

What are the characteristics of Muslim consumers?

Interestingly, we found there is a new modern Muslim consumer today, who is predominantly young and has an interesting attitude towards consumption and brands very much influenced and inspired by faith. We found speaking about faith is not solely attributed to consuming halal products. Muslim consumers are looking at a company's actions just as much as they consider its halal brands.

Brands can earn the trust and loyalty of these young Muslim consumers by getting involved in the community, giving something back, practising what it preaches, helping the society enrich, empower and equip itself in anyway that fits within the brand values.

How different is that from the conventional corporate social responsibility? Why do we need to have an Islamic agency to offer services that are more about universal values?

CSR is one part of the mix. It is interesting that you mentioned CSR, because we believe that is truly what should drive a brand in a Muslim market, way ahead of advertising. In our book, we provide the dos and don'ts for community involvement, offering clients guidelines. Our objective, however, is to help create more ideas and provide case-studies of companies that have done it successfully.

We help clients understand Muslim consumers better. Most of them often prefer to go with safe advertising because of cultural sensitivities. We want them, however, to inspire and engage at a deeper level. We explain the values that matter to Muslim consumers, where most of those values are truly universal such as transparency, humanity, ethics and social consciousness. Brands can then go further and start empathising and incorporating the nuances to show they understand the consumers' values and needs. We are not preaching that brands should convert or change their practices. Shariah-compliance, Shariah-friendliness or empathy is nothing but universal good practice.

It is about ethical business practice, and this is what young futuristic Muslim consumers are looking for. They research brands and ask questions as any sophisticated individual in any market in the world. They are just a little bit more discerning, because they are looking for values that fit within their set of values.

What are the misunderstandings that the muslim consumers suffer?

Identity. The identity of Muslims has been attacked and misunderstood. It is being shaped by the western media that doesn't understand them and mostly tends to build stereotypes, causing Muslim consumers a great deal of frustration.

Muslim consumers are out there to prove more about their identity. According to the research, 65 per cent, which is a staggering rate, and the only one in the whole survey to show results above 50 per cent because of the methodology of the survey, take pride in being Muslims. This is what is interesting about these consumers. They are not just trying to inegtrate. They are trying to combine their identity and craft ways of integrating their religion, which is an important part of this identity, into the modern world. They don't see a conflict in that. They even find it offensive to be asked about marrying the modern world and religion, because in their opinion religion does not block them from modernity. On the contary, it has a place, it is an anchor and an inspiration.They want to show the world that they don't have a conflict and that is a big part of being misunderstood. Another part, unfortunately, is the fact that extremists have also cast a bad image on their faith.

What will this unit offer to the local brands?

We do talk about local brands and asses their strengths, in addition to global brands. We also study the advantages that local brands have over global brands and vice versa.

It is taken for granted that local brands are Shariah-compliant. Their understanding of the market is

instinctive, unlike foreign brands. Only those brands that have been around for

so long have managed to integrate themselves into people's lives and are now seen as international friends.

According to our Brand Noor Index, Nestle, Lipton and Kraft are among the top five brands perceived to be the most Shariah-friendly. The index is fairly representative, although we could not incorporate all the brands in the market.

What is the criteria for this index?

We believe that brands which have made an effort and have been around for a long time have been able to establish themselves in the region. They created initiatives and communicated with their audience using a language comprising local nuance. They have created jobs and invested in factories that makes them part of the community because they have given back as much as they have taken. Community involvement, employing people, initiatives that help enrich the communities where they operate are major criteria for this index.

We also look at their advertising strategies, executional details, tone of voice, the name, the visual identity, the packaging, the look and feel and customer service. The brands that have scored well are those that have got most of those things right.

Interestingly, we found finance and insurance brands scored at the lower end of the spectrum in consumer perception and that is because people are a bit suspicious of things they don't understand. They are suspicious of what extent a financial institution is Shariah-friendly, especially if it is an international bank.

In terms of categories, we were not surprised to find out that food brands mattered more to Muslim consumers as Shariah-friendly than banks and insurance companies.

Shariah-friendly products

Based on Ogilvy Noor's research, provenance had an important stake in making a decision about a brand. The more Muslim-friendly a country or a region is, the better perceived, but that differs according to criteria such as quality and value for money. When it comes to quality, the Western markets such as the US and Europe score very high, but when it comes to value for money, markets like China score higher. The Muslim majority markets naturally scored higher for Shariah-friendly products.

According to the research, France was not affected by the recent laws passed to ban the veil. Denmark was not studied specifically in the report, yet, consumers mentioned the issue with the offensive Danish caricatures several times, especially that many had decided to boycott all products from

Denmark. Once their governments told them it was alright to buy from Denmark again, they  felt reassured.

 Research findings

- Only 10 per cent of Muslim consumers cited "manufactured for Muslims only" as an important attribute in selecting a brands.

They rated ethics and business as more important criteria

- 45 per cent of the new generation believe that religion should be adapted to suit individual lifestyles, but that they are finding their own ways to do so

- 27 per cent of those surveyed agree with the statement that protecting Islamic values from Western lifestyle and influence of the media is important, because they believe that modernity should not be linked to  the western world.

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