Interacting with Muslim Customers for Developing New Shariah-Compliant Financial Services in a Multicultural Country

  • Intekhab Alam State University of New York at Geneseo
  • Ishaq Bhatti UBD-SBE, Universiti Brunei, Darussalam and La Trobe University
Keywords: Islamic finance, Emerging markets, Muslim customers, Customer interaction


Offering successful new services to the market is a priority for many service firms worldwide because a firm's growth and prosperity depend on regularly introducing new services to a diverse group of customers. Additionally, developing successful new services requires firm-customer interaction because a customer can provide valuable insights into the design and content of many new services. This concept of customer interaction holds even greater significance in emerging countries with a sizable Muslim population, particularly when they are in the minority. Against this backdrop, our article examines the importance of customer interaction with Muslim customers in the development of new Shariah-compliant financial services in the emerging market of India. Utilizing a multiple-case study methodology, we gathered data through in-depth interviews with service managers and Muslim customers. For data triangulation, we consulted several documents and archival records related to the new service development efforts by the participating financial service firms. By doing so, the article addresses two key research gaps in the literature. First, there is a lack of NSD (New Service Development) research within emerging markets, and second, there is a dearth of studies on the roles of Muslim customers in developing new services globally. Drawing from the case study data, we contend that developing new services that meet Muslim customer needs and comply with Shariah principles poses a challenge for many service firms. To meet this challenge, a firm must establish a system that integrates the requirements of Muslim customers into creating new services. To this end, we propose several modes and methods of customer interaction and analyze the problems involved in the interaction process with Muslim customers. Our findings suggest that contrary to the notion often found in the literature, Muslim customers are willing to collaborate with service firms to develop new services which can serve as a valuable source of information for generating service ideas. This article holds implications for financial service firms seeking to market new Shariah-compliant financial services to Muslim customers in emerging markets. Furthermore, this article has theoretical implications for literature related to the marketing of Islamic finance.


Alam, I (2014), Moving beyond the stage gate models for service innovation: The trend and the future, International Journal of Economic Practices and Theories, 4 (5), 637-646.

Alam, I (2013) Customer interaction in service innovation: evidence from India, International Journal of Emerging Markets, 8 (1), 41–64.

Alam, I. (2006) Removing the fuzziness from the fuzzy front-end of service innovations through customer interactions. Industrial Marketing Management, 35 (4), 468-480.

Alam, I. (2002). An exploratory investigation of user involvement in new service development. Journal of the Academy of Marketing Science, 30 (3), 250-261.

Alam, I & Bhatti, I (2023), A comparative analysis of financial service development strategies of Indian and Australian firms. Academy of Marketing Studies Journal, 27 (5): 1-15.

Alam, I. & Perry C. (2002), “A customer-oriented new service development process” Journal of Service Marketing, 16 (6), 515-534.

Alam, I & Seifzadeh P (2020). Marketing Islamic Financial Services: A Review, Critique and Agenda for Future Research, Journal of Risk and Financial Management, 13 (1/12), 1-19.

Antoniazzi, S. (2022). Islamic Banks and the European Banking Union: An Overview of Critical Issues and Perspectives. European Journal of Islamic Finance, 9(1), 37-55.

Banerjee, S., Prabhu, J.C & Chandy, R.K (2015), Indirect learning: How emerging market firms grow in developed markets. Journal of Marketing, 79 (1), 10-28.

Basov, S. & Bhatti, M.I (2016), Islamic Finance in Light of Modern Economic Theory, UK: Palgrave-Macmillan.

Bello, D., Radulovich, L., Javalgi, R., Scherer, R., & Taylor, J. (2016). Performance of professional service firms from emerging markets: Role of innovative services and firm capabilities. Journal of World Business, 51(3), 413–424.

Biancone, & Radwan, M (2016), European companies: evaluation for sharia compliance “opportunities and challenges”. European Journal of Islamic Finance, (5), 1-7.

Biancone, P. P., & Radwan, M. (2015). Sharia Compliant “Possibility for Italian SMEs”. European Journal of Islamic Finance, (1). 1-9.

Bonoma, T. (1985), Case Research in Marketing: Opportunities, Problems and Process, Journal of Marketing Research 12, 199-208.

Bowers, M.R. (1989). Developing new services: improving the process makes it better, Journal of Services Marketing 3 (1), 15-20.

Bulmer, M & Solomos, J (2010), Introduction: Muslim minorities in Western Europe, Ethnic and Racial Studies, 33 (3), 373-375.

Burton, D. (2000). Ethnicity, identity and marketing: a critical review, Journal of Marketing Management 16, 853–877.

Carlborg P, Kindstrom, D & Kowalkowski, C (2014), The evolution of service innovation research: a critical review and synthesis. Service Industries Journal, 34 (5), 373-398.

Chang W & Taylor, S.A (2016). The effectiveness of customer participation in new product development: A meta-analysis. Journal of Marketing, 80 (1), 47-64.

Chatterji, A.K. & Fabrizio, K.R (2014), Using users: when does external knowledge enhance corporate product innovation? Strategic Management Journal, 35 (10), 1427–1445.

Chaudhury, M. A., & Bhatti, M.I (2017). Heterodox Islamic Economics: The emergence of an ethico-economic theory, U.K: Routledge.

Chowdhury, S. R. (2011). Impact of global crisis on small and medium enterprises. Global Business Review, 12(3), 377-399.

Cooper, R.G (2019), The drivers of success in new-product development, Industrial Marketing Management, 76, 36-47.

Cui, A.S, & Wu, F. (2017) The impact of customer involvement on new product development: contingent and substitutive effects, Journal of Product Innovation Management. 34 (1), 60-80.

Dariyoush, J & Nazima H (2016), Forecasting patronage factors of Islamic credit card as a new e-commerce banking service: An integration of TAM with perceived religiosity and trust. Journal of Islamic Marketing, 7 (4), 378-404.

Davidson A, Habibi M.R & Laroche, M (2018) Materialism and the sharing economy: A cross-cultural study of American and Indian consumers. Journal of Business Research, 82 (1), 364-372.

Deshpande, R. & Stayman, D. (1994), A tale of two cities: Distinctiveness theory and advertising effectiveness, Journal of Marketing Research, 31(February), 57-64.

Deshpande, R, Farley, J.U & Webster Jr. F.E (1993), Corporate culture customer orientation, and innovativeness in Japanese firms: A quadrad analysis, Journal of Marketing, 57 (1), 23-27.

Eisenhardt, K.M (1989). “Building Theories from Case Studies”, Academy of Management Review, 14 (4), 532-550.

Fasih, F (2012), Inclusive growth in India through Islamic banking, Procedia - Social and Behavioral Sciences, Volume 37, 97-110.

Frankie, N, Keinz, P & Steger, C.J (2009). Testing the value of customization: when do customers really prefer products tailored to their preferences? Journal of Marketing, 73 (5), 103–121.

Gebhardt, G.F., Carpenter, G.S., & Sherry, J.F. Jr. (2006) Creating a market orientation: a longitudinal, multifirm, grounded analysis of cultural transformation. Journal of Marketing, 70 (5), 37-55.

Grier, S., & Deshpandé, R., (2001), Social dimensions of consumer distinctiveness: The influence of social status on group identity and advertising persuasion, Journal of Marketing Research, 38 (2), 216–224.

Gruner K.E & Homburg C. (2000). Does customer interaction enhance new product success? Journal of Business Research, 49 (1), 1-14.

Hall, C. M., Prayag, G., Oh, Y., Mahdavi, M. A., & Xin Jean, L. (2023). Positionality, inter-subjectivity and reflexivity in Muslim minority research. International Journal of Market Research, 65(6), 778-795.

Hati, S.R.H., Wibowo, S.S. & Safira, A. (2021), The antecedents of Muslim customers’ intention to invest in an Islamic bank’s term deposits: evidence from a Muslim majority country", Journal of Islamic Marketing, 12 (7), 1363-1384.

Heirati, N., O' Cass, A., Schoefer, K., & Siahtiri, V. (2016). Do professional service firms benefit from customer and supplier collaborations in competitive, turbulent environments? Industrial Marketing Management, 55(5), 50–58.

Hilmy, H. M. A., Sajith, S., & Ilma, M. (2023). Awareness of Islamic financial institutions among non-Muslims in the Ampara district of Sri Lanka. European Journal of Islamic Finance, 10(2), 1-12.

Holtbrügge, D. & Friedmann, C.B. (2016) Does location choice affect foreign subsidiary success in India? An empirical study based on Porter’s diamond model, International Journal of Business and Emerging Markets, 8 (1), 3–29.

Homburg, C. Wilczek H & Hahn, A. (2014), Looking beyond the horizon: how to approach the customers' customers in business-to-business markets. Journal of Marketing, 78 (5), 58-77.

Hoyer, W. D., Chandy, R. Dorotic, M, Krafft, M & Singh, S.S (2010), “Consumer cocreation in new product development,” Journal of Service Research, 13 (3), 283–96.

Jain, Y (2013), Financial services sector at the center stage of Indian economy: Opportunities & challenges, Asia Pacific Journal of Management & Entrepreneurship Research, 2 (1), 209-220.

Jamal, A. (2003). Marketing in a multicultural world: the interplay of marketing, ethnicity and consumption. European Journal of Marketing, 37 (11/12), 1599–1620.

Jamal A & Shukor, S.A (2014) Antecedents and outcomes of interpersonal influences and the role of acculturation: The case of young British-Muslims, Journal of Business Research, 67, 237-245.

Johnson, J.S & Sohi R.S (2016), Understanding and resolving major contractual breaches in buyer-seller relationships: a grounded theory approach, Journal of the Academy of Marketing Science, 44 (2), 185-205.

Kamdzhalov, M. (2022). Evaluation of some key features of Islamic finance in non-Islamic economies: Bulgarian perspective. European Journal of Islamic Finance, 9(2), 9-17.

Karadag, H. (2016), The role of SMEs and entrepreneurship on economic growth in emerging economies within the post-crisis era: an analysis from Turkey, Journal of Small Business and Entrepreneurship Development, 4 (1), 22-31.

Knight, J., Mitchell, B., & Gao, H. (2009). Riding out the Muhammad cartoons crisis: Contrasting strategies and outcomes. Long Range Planning, 42 (1), 6–22.

Kravets, O & Sandikci, O (2014), Competently ordinary: New middle class consumers in the emerging markets, Journal of Marketing, 78 (4), 125-140.

Kurpad M.R (2016) Making a case for Islamic finance in India, Law and Financial Markets Review, 10 (1): 38-45.

Lee, K., Kim, H., & Vohs, K. (2011). Stereotype threat in the marketplace: Consumer anxiety and purchase intentions. Journal of Consumer Research, 38 (2), 343–357.

Leonard-Barton, D (1990), A dual methodology for case study: Synergistic use of longitudinal single site with replicated multiple sites, Organization Science, 1 (3), 248-266.

Lyons, R.K, Chatman, J.A & Joyce, C.K (2007), Innovation in services: corporate culture and investment banking, California Management Review, 50 (1), 174–191.

Mahavarpour, N, Marvi, R & Foroudi, P (2023), A brief history of service innovation: The evolution of past, present, and future of service innovation, Journal of Business Research, 160, 113795.

Maliepaard, M., Lubbers, M., & Gijsberts, M. (2010). Generational differences in ethnic and religious attachment and their interrelation. A study among Muslim minorities in the Netherlands. Ethnic and Racial Studies, 33 (3), 451-472.

Matthing, J., Sanden, B., & Edvardsson, B. (2004). New service development: Learning from and with customers. International Journal of Service Industry Management, 15 (5), 479–498.

McCracken, G. (1988), The Long Interview, Sage, Newbury Park, CA.

Melton, H.C & Hartline M.D (2010), Customer and frontline employee influence on new service development performance, Journal of Service Research, 13 (4), 411-425.

Menguc, B., Auh, S., & Yannopoulos, P. (2014). Customer and supplier involvement in design: The moderating role of incremental and radical innovation capability, Journal of Product Innovation Management, 31(2), 313–328.

Miles, M.B., Huberman, M.A & Saldana, J (2014), Qualitative Data Analysis, 3rd edition, Sage Newbury Park, CA.

Moosa, R. & Kashiramka, S. (2023), "Objectives of Islamic banking, customer satisfaction and customer loyalty: empirical evidence from South Africa", Journal of Islamic Marketing, 14 (9), 2188-2206.

Morgan, T & Anokhin, S (2023), Entrepreneurial orientation and new product performance in SMEs: The mediating role of customer participation, Journal of Business Research, 164, 113921.

Ostrom, A, Parasuraman, A, Bowen, D, Patrıcio, L & Voss, C. (2015), Service research priorities in a rapidly changing context, Journal of Service Research, 18 (2), 127-159.

Oullet, J (2007), Consumer racism and its effects on domestic cross-ethnic product purchase: an empirical test in the United States, Canada, and France, Journal of Marketing, 71 (1), 113-128.

Papastathopoulou, P & Hultink, E.J (2012), New service development: An analysis of 27 years of research. Journal of Product Innovation Management, 29 (5), 705-714.

Penaloza, L, (2018) Ethnic marketing practice and research at the intersection of market and social development: A macro study of the past and present, with a look to the future. Journal of Business Research, 82 (1), 273-280.

Pereira, V, Laker, B, Bamel, U, Sharma, G.D & Paul, H (2024), Customer engagement strategies within family businesses in emerging economies: A multi-method study, Journal of Business Research, 174, 114508.

Pettigrew, A.M (1990). Longitudinal field research on change: theory and practice, Organization Science, 1 (3), 267-292.

Perks, H., Gruber, T., & Edvardsson, B. (2012). Co-creation in radical service innovation: A systematic analysis of microlevel processes, Journal of Product Innovation Management, 29 (6), 935–951.

Perry, C. (1998). “Processes of a Case Study Methodology for Postgraduate Research in Marketing.” European Journal of Marketing, 32 (9/10), 785-802.

Pires & Stanton (2015) Ethnic Marketing: Culturally Sensitive Theory and Practice, London and New York: Routledge.

Pires, G, Stanton, J, Stanton, P. (2011) Revisiting the substantiality criterion: From ethnic marketing to market segmentation. Journal of Business Research, 64 (9), 988-996.

Price Waterhouse Cooper (2007), Entering the Indian Financial Service Market, Price Waterhouse Cooper L.L.P London.

Russell, C., & Russell, D. (2010). Guilty by stereotypic association: Country animosity and brand prejudice and discrimination, Marketing Letters, 21 (4), 413–425.

Sachar Committee Report (2006), Social, Economic and Educational Status of the Muslim of India. Prime Minister’s High Level Committee, Cabinet Secretariat, Government of India.

Scheuing, E.E & Johnson, E. M (1989). A proposed model for new service development. Journal of Services Marketing, 3 (2), 25-35.

Seth, J.N (2011), Impact of emerging markets on marketing: rethinking existing perspectives and practices, Journal of Marketing, 75 (4), 166-182.

Siddiqui, T.A, Naushad, M & Farooque, M.K.U (2021) A study on Islamic finance as an approach for financial inclusion in India, Accounting 7 (2021) 487–496.

Stevens, E., & Dimitriadis, S. (2004). New service development through the lens of organizational learning: evidence form longitudinal case studies. Journal of Business Research, 57 (10), 1074-1084.

Storey, C., & M. Hughes, M (2013). The relative impact of culture, strategic orientation and capability on new service development performance. European Journal of Marketing, 47 (5/6), 833–56.

Storey, C, Cankurtaran, P, Papastathopoulou, P & Hultink, E. (2016), Success factors for Service innovation: A meta-analysis, Journal of Product Innovation Management, 33 (5), 527-548.

Sutton, C.N & Jenkins, B. (2007), The role of the financial services sector in expanding economic opportunity, Corporate Social Responsibility Initiative Report No. 19, Kennedy School of Government, Harvard University.

Tegambwage, A.G. & Kasoga, P.S. (2023), Determinants of customer loyalty in Islamic banking: the role of religiosity", Journal of Islamic Marketing, 14 (12), 3150-3167.

Wilson, J., & Liu, J. (2011). The challenges of Islamic branding: Navigating emotions and halal, Journal of Islamic Marketing, 2 (1), 28–42.

Yatoo, B.A & Muthu, S. S (2013) Islamic Finance in India: An Assessment of Idea and Awareness., The International Journal of Excellence in Islamic Banking and Finance, 3 (2):1-10.

Yin R.K (2002), Case Study Research – Design and Methods, Newbury Park, CA: Sage.

Yoo, J, Arnold, T & Frankwick, G.L (2012), “Effects of positive customer-to-customer service interaction”, Journal of Business Research, 65 (9), 1313-1320.

How to Cite
Alam, I., & Bhatti, I. B. (2024). Interacting with Muslim Customers for Developing New Shariah-Compliant Financial Services in a Multicultural Country. European Journal of Islamic Finance, 11(1), 1-16.