In: Economics
Yakini Alliance Bank Limited (YAB) was established in 2005 as a conventional bank. YAB has been granted a full-fledged Islamic Bank license by the Central Bank and will commence operation under the new regime with effect from January 2019. i) Elaborate how YAB should apply the SMART approach in setting up its marketing objectives for the new entity. ii) Suggest TWO (2) marketing tools besides the common face-to-face marketing communication that can be adopted by YAB in promoting its entity as a new player in Islamic banking and the product offerings. Justify the impact of each of the proposed marketing tool to the successful market penetration by YAB.
Islamic Banks are based on Sharia Law and works in compliance of it. These are different from commercial banks as they do not depend on interest neither in lending or accepting deposits. It is based on sharing of profits. Apart from that these banks do not involve in things banned in Islamic Sharia Law like investments are not made in alcohol, pork, gambling etc are not made.
SMART approach in management is an effective plan. SMART stands
for S- Specific, M- Measurable, A- Achievable, R- Realistic
and T- Timely. YAB bank can apply this in the following
manner.
SPECIFIC - While marketing it shall outline that the bank caters to
the need of a specific market. And thus all the actions in the bank
will be taken in accordance with it. Strict Islamic laws will be
practiced.
MEASURABLE - Fundamental principle of Islamic banks is that it does
not charges or pays interest and it shares profit and loss with the
clients. So YAB bank can market itself by providing nos. as to what
the investors and customers can expect in terms of profit.
ACHIEVABLE - The goals that are set shall be achievable. Because
then only the bank can will be able to earn reliability.
REALISTIC - YAB bank shall not make promises to its customers that
are not realistic. For ex high profits that are less likely to be
achieved.
TIMELY GOAL - A goal or promise seems reliable if a time frame is
attached to it. It can tell its future customers the time frame in
which they can expect returns. It should be reliable and
achievable.
Apart from face to face marketing YAB bank can adopt strategies like advertising in areas having maximum muslim population, since they are the actual customers. It can also introduce innovative products in compliance with sharia and market them.
All these strategies will help YAB to penetrate the its target market.