MARKETING STRATEGIC OF FINANCIAL SERVICES BY ISLAMIC BANKS

The aim of this study is to explore and pinpoint some marketing strategies issues which can be helpful for new investors and old stakeholders in the sector of Islamic banking in Pakistan, In order to penetrate successfully in the market. The research problem of this study is to investigate that what can be suitable and effective marketing strategies for Islamic Banking in Pakistan? Our target groups are those Islamic banks and standalone Islamic bank branches that are currently working in Pakistani market and those who are interested in exploring the Pakistani market. There has come a swift transition in the financial services in the world including Pakistan. A new mode of banking, such as Islamic banking has been introduced and accepted widely in many countries of the world including Pakistan. Our study has portrayed the current situation for Islamic banking in Pakistan by investigating the current competition of the industry using porter five forces model and at using PEST analysis macro level. We have analyzed that the competition is very high in the industry and Islamic banks could take more market shares by introducing the more innovative products with less price as compared to conventional banks and by widen up their branch network to all small and big cities of Pakistan.


INTRODUCTION
Over the past three decades, Islamic banking has emerged as one of the fastest growing industries. It has spread to all corners of the globe and received wide acceptance by both Muslims and non-Muslims alike (Iqbal and Molyneux, 2005). Islamic banks perform the same essential functions as banks do in the conventional system, except that the need for them to carry out their transactions in accordance with the rules and principles of Islam, (Henry and Wilson, 2004;Iqbal and Mirakhor, 2007). Islamic banking is a growing sector in Pakistan and many other countries as well. Authors have analyzed the present situation of Pakistan by using the theoretical framework of mainly Porter's five competitive forces and PEST analysis, for Islamic banking sector in Pakistan.
In order to improve performance and ensure sustainable growth of Islamic banks, marketing strategy is one of the most important issues. A suitable marketing strategy can be developed by understanding internal strengths and weaknesses and the external opportunities and threats. Authors have given their analysis based upon the empirical findings and pinpointed some important opportunities and threats for this sector MS . This study also gives some recommendations which can be useful for those who want to build a competitive marketing strategy for Islamic bank in Pakistan. These recommendations and discussions can be very useful in making a suitable and effective marketing strategy which in turn can lead to sustainable growth. We have tried to cover Pakistan's political, economic, socio-cultural, technological and legal environment and framework in general MS . So, this information may not be only useful for Islamic banking sector but also for other sectors who want to get knowledge about these uncontrollable environmental forces as sufficient knowledge and analysis of these forces is necessary in order to make a good marketing strategy. This framework can be applied to any organization and sector in general but to Islamic banking sector in Pakistan in specific.
We came to know during our analysis that Islamic banking sector is offering somewhat same services and products with a little change (according to Islamic Shriah laws) as compared to conventional bank's products. We recommend them that they should bring innovation in their products and services which could be achieved through more research on Islamic banking and consumer behavior. Innovation can be of different types like product innovation, service innovation and process innovation. (Davenport 2006). Islamic banks must have separate research departments and Shriah board should assist this department. Islamic banks should have more innovative products which should be in track with Shriah. They should go beyond the traditional type of banking in which only upper class of the population can take part. They should bring more innovation using technology like IT and telecom and introduce a varied range of services and products, so as to capture maximum pool of clients. This recommendation is also based on the product development option from the four available options of Ansoff Matrix.
We have observed during our empirical findings and analyses that all Islamic banks in Pakistan have their own Shriah boards which assist them in finalizing the products and services that either these are valid according to Islamic laws . Although these Shriah boards give their recommendations according to Islamic laws but conflicts have been observed among the opinions of different Shriah boards for the same product. As a result of these conflicts, consumers get confused that which Islamic bank is right and what product is according to Shriah. Islamic banks must introduce a standard Shriah board which could bring standardization in the sector.
Mostly Islamic banks are trying to promote the sector just in the name of religion. We have analyzed that although many people are interested in dealing with Islamic banks just because of prohibition of interest in Islam. Yet, there are a great number of customers who choose the banking services on the basis of services, quality and profitability. We recommend to those who planning to start new Islamic banks or those who are already running Islamic banks that they should run a proper media campaign so as to bring awareness to the consumers about their Http://www.granthaalayah.com ©International Journal of Research -GRANTHAALAYAH [19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34] services and products on the basis of competitiveness MS . They should arrange some seminars, events and media talks for the managers of small and large organizations and laymen as well, to make them realize the actual essence of Islamic banking. As the spirit of Islamic banking is not only profitability but also the betterment of the society. So they should start investing in projects through which people get more benefits and employments. This can be their positive contribution for the society from where they are getting their business. As only those businesses retain in the long run and get loyal customers who take care of ethical perspectives in the marketing strategies and unethical businesses are less likely to succeed. (Tahir 2008) Our analysis reveals that one third population is living in rural areas and there is also a lack of financial services for them. People of rural areas are comparatively more religious than those of urban areas. Female population has also been ignored to target by other financial institutions. We recommend that Islamic banks should widen their activities to these areas and try to capture and involve the female segment of the population as it constitutes a big set of consumers Shahzad and Rehman (2015). This strategy is "Diversification" according to Ansoff Matrix. Diversification means the new products and new services in the new market place. Mainly the staff of Islamic banks does not have adequate knowledge about Islamic banking as most of them have their educational and training background in conventional banking sector. Scholars of Shriah boards have good knowledge of Islamic teaching and laws but some are lacking behind in the field of banking knowledge. We recommend that there must be conducted training sessions and workshop to overcome this problem. Http://www.granthaalayah.com ©International Journal of Research -GRANTHAALAYAH [19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34] found that there were some issues related to the suitability of branch but input and services quality have significant effect on branch output. Mols (2000) Examines the various aspects of valuation, perception, expectations related with the introduction of internet banking in Danish Retail Banking. Interview from 60 managers in Largest Retail Banks in Denmark showed that they believe in future internet banking will become more important than other; they are less focusing all other distribution channels. They are focusing that the perceptions and expectation from internet banking is due to the reason of offering the internet banking and the banks are organized well through internet banking.

Islamic
In current scenario the financial services institutions shifted from face-to-face interaction to direct marketing including phone, mail and technology. Consumer's preference toward face-toface interaction vs direct marketing was examined through empirical study in 15 different products and services and they found that most of the people prefer direct marketing than faceto-face interaction in current technology advancement era. But there is need of face to face interaction as well. (Jinkook lee, 2002).
Gulzar,H. Zurbruegg, R(2006) examined the awareness of Muslim in Australia about Islamic Banking, especially profit and loss sharing agreements. A sample of 300 Muslims were surveyed utilizing a short questionnaire containing specific questions relating to willingness of respondents to purchase profit and loss sharing Islamic banking products. Results indicate that the majority of the respondents are interested in purchasing these products, but are not properly informed about how they function. It was Common to find respondents who were keen to purchase Islamic banking products, but only if credit facilities were available. This is disagreeing to Islamic Shariah law, and advises a lack of understanding of the principles of Islamic finance.

SUITABLE AND EFFECTIVE MARKETING STRATEGY FOR ISLAMIC BANKING IN PAKISTAN
On the basis of all our previous discussion, the marketing strategy for Islamic banking will be explained in this section. The marketing strategy makers of Islamic banking should take care of the 4Ps of the marketing i.e. Product, price, place and promotion. Best market strategy for Islamic banking will be the one in which these four things are dealt carefully. (Kotler 2000) Product: So far Islamic banks are using two products such as, leasing and cost plus for doing their businesses. They should bring more innovative products in the market. As explained in the first chapter, they have many products but are reluctant to use those products. Innovation is the main thing which will distinguish them from the conventional banking.
Price: As we have explained in the previous chapters that majority of people in Pakistan belong to middle class and are very price sensitive. And as the competition is getting intense day by day with more banks coming into the Islamic banking industry and bargaining power of people is also very high, so people have now more choices and they choose the particular service on the basis of price. Price of Islamic banking products/services should be lower than the conventional banks or at least in line with the conventional banks.
Place: Mostly banks are situated in the urban areas. We described earlier that there is a great potential available for Islamic banks in the rural areas and small towns. Islamic banks have far less branches as compared to conventional banks. However, only Meezan bank has 100 branches, all other Islamic banks have branches less than 50. Islamic banks should increase their branches and they should pay special attention to small towns and urban areas, as there lies much more potential in those areas.

METHODOLOGY AND DISCUSSION
In order to get exact opinion from target people, we distributed 65 questionnaires among different people. However, questionnaires consist on following questions, your target customers, what objective behind the marketing of your business? What emotions do you want to associate with your product? Marketing budget? Long term strategy, your level of success in the marketing, Challenges did you faced in this awareness process? Where will you be selling your products or services? Do you know your Unique Selling Proposition? (That which makes you different from all your competitors), Product's biggest selling point? Which of the following medium would you prefer for the marketing purposes? Development level of Islamic Banking in Pakistan, Do you think that you have created awareness among people regarding Islamic Financial Services?
In the tables of data analysis, different colors are marked, which means that particular value is required in our analysis and it also show a significant effect. This study consists on the result of value added risk (VAR) in different situations. A survey of households to evaluate the relative importance attached to selection criteria used to choose a financial institution. With rapid change and more sophisticated customers, it has become very important that financial institutions determine the factors which are appropriate to the customers' selection process. Using a telephone survey, ten selection criteria were provided relative to various demographic characteristics of 188 randomly selected households in a medium-sized southeastern city of the USA. Characteristics included, marital status, size of household, age of children, occupation of head of household, household income, age and gender of household head. Http://www.granthaalayah.com ©International Journal of Research -GRANTHAALAYAH [19][20][21][22][23][24][25][26][27][28][29][30][31][32][33][34] ii. SME/ Businessman iii. Corporate Sector         Challenges did you faced in this awareness process? i. Technology ii. Untrained Staff iii. Rural Marketing iv.
Lack of interest of customer However, we preferred green area for challenges and awareness process.
 Where will you be selling your products or services? i. Local ii. National iii. International

CONCLUSION
A swift transition comes in the financial services in whole world including Pakistan. A new mode of banking such as, Islamic banking has been introduced and accepted widely in many countries of the world including Pakistan. Our study has portrayed the current situation for Islamic banking in Pakistan by investigating the current competition of the industry using porter five forces model and at macro level using PEST analysis.
Our empirical findings clearly show that there are many prospects for the growth of Islamic banking in Pakistan and environment is favorable for this sector. There is much more potential for already running Islamic banks and newly investors in this segment as well. Although there is a political instability in Pakistan, but the autonomous position of State Bank of Pakistan (SBP) is providing a shelter to this sector against political instability. SBP has provided the Islamic banking sector with sufficient legislations and policies, so as to assist this sector and increase its efficiency. Although economic of Pakistan has shown a consistent growth in the last couple of years but the rise in inflation rate (due to multiple factors) can cause problems for investors. The socio-cultural factors of Pakistan are in favor of Islamic banking but it needs to be addressed properly and carefully. Pakistan is an Islamic democratic country, so there is much space and opportunity available for Islamic financial service providers including Islamic banks. There is also one problem that people are not very educated and literacy rate of Pakistan is very low that's why many people think that Islamic banks are just using the name of the Islam otherwise they are same like conventional banks.
Technology wise Islamic banks have many opportunities because in Pakistan there is a boom of telecom sector and Information Technology industry. Most of the banks are using these services like e-banking, online banking and ATM machines for facilitating their customers. Competition in the industry is very high. Islamic banking is new in the industry. There are so many conventional banks in the industry already. But the growth rate of Islamic banks is very good but they are still far behind from the conventional banks in terms of market share. There are a lot of obstacles in the progress of the Islamic banking in Pakistan like separate 'Shariah' boards of each bank and shortage of educated human resource. Conventional banks are also coming in this field by opening standalone branches of Islamic banking which has increased the competition.