Risk Mangement in Marketing

Marketing in the global Muslim segment differs (from other consumer segments) in terms of risk and organisational demands. The risks should not be underestimated. They should be thoroughly studied and evaluated on two levels:

Product/Brand level– A product and brand risk analysis will consider the impact that  targeting the Muslim consumers might have on the organisation’s core global brand if the product is sold in non-Islamic markets.
Corporate level– A corporate level risk analysis will take into account a wider view of potential transnational consumer activism, thereby, enabling the organisation to be ready to deal with at least three potential threats— social, political and financial.

  1. Social Risk: by virtue of their numerical strength and purchasing power the Muslim consumer can choose “not to buy”. Such “not to buy” acts are not uncommon. Recall the indignation and subsequently the impact the global Muslim community had over the publication of cartoons of our beloved Prophet (P.B.U.H) in a Danish newspaper. The subsequent lack of political and cultural empathy led to a widespread boycott of Danish products to the extent that even western retailers removed Danish products from their shelves due to fear of negative repercussions.
    At the same time, there is also the risk of social extremism, in which a group, vocally denounces the brand for putting forth itself in a “halal’ manner for the Muslim community. This can (and does happen) due to the ignorance and Islamophobic viewpoints that some harbour.
  2. Political Risk: Given the rising awareness of Islam, and a new-found resurgence of the Muslim identity, governments across Muslim countries have responded with regulatory changes. Malaysia, for example, has created its competitive advantage by promoting halal foods, Islamic Finance and halal tourism. Kuwait, had its first women ministers a year ago. Such a environment needs to be taken into account by the brand at planning stage inorder to be able to customise its offering adequately.
  3. Financial Risk: An existing organisation has to evaluate the potential ‘fallout’ that may occur through alienating the existing consumer base by entering the Muslim consumer segment AND also has to check potential revenue loss from not correctly serving the Muslim consumer. This needs to be balanced out versus the projected revenue growth expected from serving the Muslim segment.