MARKETING STRATEGY OF ISLAMIC BANKS Author : Professor Sudin Haron and Dr Wan Nursofiza Wan Azmi

Marketing strategy is one the most impor-
tant areas that needs to be carefully exam-
ined by the policy makers of Islamic banks.
This stems from the need to improve the
performance and ensure sustainable growth
of Islamic banks as competition in the bank-
ing industry intensifies. A sound market-
ing strategy becomes imperative as Islamic
banks not only operate in an environment
where service quality and financial returns
are perceived as the essential criteria from
customers’ viewpoint, but they must also
compete with conventional banks which are
known to have better experience and exper-
tise in the banking business. Religious ele-
ment, which was once thought as the ma-
jor factor that drives Muslims to use Islamic
banking facilities offered by Islamic banks,
has now become irrelevant to Muslim cus-
tomers. Coupled with an increasing competi-
tive environment from both Islamic and con-
ventional banks and changes in customers’
perception; it is of paramount importance
for Islamic banks to assess the effectiveness
of their marketing strategy. This paper re-
views the current marketing strategy of Is-
lamic banks in Malaysia. Among the topics
highlighted are strategies related to prod-
uct, pricing, promotion, distribution chan-
nel, and human resources. The study finds
that the newest Islamic bank and Islamic
banking department of conventional banks
have more aggressive marketing objectives
than the pioneering Islamic bank