A Simplified Method for Understanding Judgment and Decision Making of Muslim Consumers

Introduction

Muslims and Islamic law have long attracted researchers and business practitioners for further exploration. The large number of Muslims in some countries, and their corresponding purchasing power, are the main two factors that have led to this exploration. Of interest, the Pew Research Center (2011) issued a report on the three markets with the largest projected proportion and overall number of Muslims in the population by 2030: Pakistan (256,117,000), Indonesia (238,833,000), and India (236,182,000). Compared to the number of Muslims in 2010, the report shows a change in ranking with Indonesia becoming the largest (204,847,000), followed by Pakistan (178,097,000) and India (177,286,000). The Pew Research Center also reported on the distribution of Muslims around the world in 2030. The majority of Muslims (78.1 percent) are projected to live in Muslim-majority countries, while a small percentage will live in non-Muslim-majority, less developed countries (19 percent), followed by non-Muslim-majority, more developed countries (2.9 percent). Compared to the data for 2010 (Pew Research Center, 2011), this composition does not change significantly, which suggests that understanding the distribution of Muslims around the world would facilitate profitable access to these interesting markets .

Researchers have investigated Muslims and their behaviours in the past. For example, in their study of Muslim immigrants in a Non-Muslim-majority country, Britto and Amer (2007) found young adult consumers in America adapted to American culture but still maintained their Arab culture, which suggests that one’s original culture does not easily disappear and that local culture should not be ignored in forming their behaviour. Similar findings on immigrants were shown in the study of Jasperse et al. (2012), who found that Muslim women in New Zealand maintain their identity, such as wearing a hijab, as it is associated with life satisfaction and lowers psychological distress. The latter finding suggests that a proper understanding of the decision making of Muslim consumers requires a broader knowledge on their observance of Islamic principles. In addition to studies on Muslim immigrants, Bakar et al. (2013) found that religious symbols in product packaging related to Muslim values influence consumers’ purchase intention; in particular, the influence is higher for consumers with high religiosity than for those with low religiosity. This finding of Bakar suggests that Islamic symbols are relevant to Muslims’ decision making.

In response to the significant portion and distribution of Muslim consumers in the world, business practitioners have developed products based on compliance to Islamic rules. For example, to fulfil Muslims’ need for foods and beverages, companies produce products following halal certification to achieve wider access to Muslim markets. Also, to attract investment from Muslim consumers, companies and government offer sukuk, a type of bond that meets Islamic principles. To capture Muslims’ needs for insurance, companies that are currently selling insurance products provide innovative products by offering takaful, an insurance product that fits with Islamic rules. In daily banking, business practitioners offer Islamic banking, a banking system that takes into account the prohibition on interest. The wide range of products that take into account their fitness with Islamic principles suggests that Muslims have a large number of options in fulfilling their needs. Thus, these products should receive sufficient attention and preference among Muslims in that Islamic principles have been considered and adopted in the creation of such products.