Factors Influencing Non – Muslims to Purchase Halal Food in Malaysia
Chapter 1: Introduction The word Halal refers to the term permissible or allowed to eat in Arabic (ehow.com). It is an important way of life lived by the Muslims and it isn’t only consisted on food but other products too. It doesn’t only matter what kind of food it is, but the preparation method of the food is considered very important as well. The Halal food guarantees safety, hygiene, healthy eating lifestyle and wholesomeness. Halal is all about the place and the process used for slaughtering the animals and the condition those animals are kept in. Halal is now being recognized all over the world not only by the Muslims but also the Non-Muslims community. An example of how other countries around the world are adapting to Halal food is shown in Moscow, Russia. In Moscow the sales were $45 in 2004 and then increased to $70 million in 2006 and then to $100 million in 2008 (Muhammad, 2007). The growth is due to consumer’s perception of human animal treatment concerns. Russians purchased Halal food because they thought the products were fresh, safe and infection free and also believed that the Muslims won’t cheat them. In the Philippines the population looks for the Halal logo on the products so that they can purchase them easily. Malaysia consists of 3 different races which are the Malaya, Chinese, and Indians. 62% of the Malays are Muslim, 24% Chinese are either Buddhist or Traditional Chinese religions and 8% are Indians who follow Hinduism (department of statistics Malaysia, 2011). The Chinese and Indians don’t really pay attention whether the food is Halal or not. They don’t really know the benefits of the Halal food and they’re not aware of the fact that the products have to go through an inspection before they are allowed to be used. More Non-Muslims would prefer Halal food if they found out about health issues, animal rights and safety, environment, social justice and welfare. Therefore the objective here is to the underlie components which would influence non-Muslims consumers to change their perception and attitude towards Halal products in Malaysia.

1.1 Background of the study The Halal market is one of the most influential market areas today and not a religious issue either. Halal food has now become like a lifestyle which the people themselves choose because of the quality assurance. Halal products assure people of safety and quality products. Even non Muslim countries such as China, United Kingdom, United States, and Australia, have started to take this method seriously and are working towards producing such products and services for the public. Halal has logo’s, covering packaging, labeling of products. They are also applied to other sectors such as food processing plant, hotel operations, pharmacies, cosmetics, medical and many other industries. http://www.nikmaheran.com/v1/attachments/027_ASS-Halal%20hub.pdf There is a tremendous growth in the Halal market. Muslim and non Muslim countries are both exchanging Halal standard products and services which could be worth trillions of US dollars. The annual global market value for Halal trade is around $2.1 trillion from which $1.6 billion represents global Muslim population (hdcglobal.com, 2011). Malaysia has the potential of being a big supplier for Halal trades. Since Malaysia is a developing Islamic country, and is a business friendly to both Muslims and non – Muslims industries, it can be very beneficial to run a business here (hdcglobal.com, 2011). Halal food is basically aimed for Muslims, but even non Muslims tend to like the food (Golnaz, R., *Zainalabidin, M., Mad Nasir, S. and Eddie Chiew, F.C., 2010). Therefore to increase awareness of Halal products in Malaysia, they need to differentiate that food & beverages like alcohol and pork aren’t considered under the category. Halal is branded as eco – ethical lifestyle which is currently a rapidly growing market in the West. Eco – Ethical is a non racist, environmental, not causing damages to the body, and a corporate social responsible market. In the near future it’s considered the Eco-ethical products would take place of Green products in the market. It is important to make research on how non-Muslims look at Halal products or Eco-ethical products. This report consists of 6 chapters. Chapter 1 is the introduction of the study, research background, problem statement, significance of study, scope of the study. Chapter 2 consists of the literature review. Chapter 3 will talk about the methodology used, followed by chapter 4 which will give a detailed data analysis. Chapter 5 is going to describe my findings and lastly conclusion; which would summarize my whole final year project.

1.2 Problem Statement With the high number of environmental issues on the rise, there are many firms around the world which are trying to manufacture and come up with new green products. Halal food will eventually take over the green products without allowing the quality of the products to fall down. The Halal food is also penetrating on the Global trade market, which is making a lot of consumers, suppliers, and retailers choose eco-ethical products over others. This would then result in high market value and a lot of sales, making Halal products popular. Another thing is that once the people are properly aware of the foods benefit, then only they would switch to Halal food. Thus, this requires properly managing the information and providing it to the consumers. In order to do that, the marketing segment should be selected properly. According to Laroche, an issue can have a major influence on the decision making process of the products (Laroche et al, 2001), that’s because if the problem can’t be solved then it can cause the business to make a lot of losses and maybe even closure. In order to make the customers purchase eco-ethical products, all the information and knowledge of the environmental issues and the features of the products must be clearly displayed. Therefore, the positioning of the product must be done carefully. Most businesses use it as an important tool for brand implementation, brand identity, and value proposition which are always communicating with the target audience and also change their opinion towards a brand (Aaker & Joachimsthaler, 2000). Since Malaysia is a Muslim country, it will create a lot of threats for businesses to operate in Malaysia because the government is highly concerned about the quality of the products produced. Therefore when it comes to controlling such issues, businesses have to follow certain rule and regulations or standards, and so the most concern standard which needs to be met is getting the ‘Halal’ certificate. Once you get the certificate it can help in practicing the international marketing. Halal products are mainly aimed at Muslim people, but since there are a large number of Muslims around the world, it has to be treated as an international marketing gimmick in current businesses. This resulted countries like China, to produce Halal standard products which would then sustain the economic growth rate to in excess of 8% (P. Quester & Karaunaratana A, 2001 and AAKER, JENNIFER L. 1997).

1.2.1 Research Objectives This study is made to identify what are the factors which significantly influence one’s purchase intention on the Halal products and what are the differences between the non – Muslims and Muslims opinions on this market. The main objective of this research is to determine the consumer’s perception about the Halal logo and its impact on the consumer behavior towards it. It is also to see what are the perceptions of consumers on the certified ingredients used for the Halal food? Another objective is to see if it is possible for Halal food to take over the market and this can be seen by the amount of consumers purchasing Halal food. If there is a lot of demand of Halal food then firms would like to invest in Halal food since there would be more profitability. The perception can be changed of the people by providing them with correct product knowledge, risks, awareness and demographic factors. Once these factors are looked at then the researches would then know how to advertise and segment the Halal products. Research made by (Jayarman Munusamy, 2006) suggests that different races look at products differently, for instance China is willing to purchase and introduce new products compared to other countries because it is now dominating the market with production in every industry. The study would look at consumers who have the highest purchasing power can actually change the market trend. What are the main factors which actually play the major role in getting them to purchase this type of food?
1.3 Significance of the study Past research made by (Bergeaud-Blackler et al, 2004 - 2006) in the form of a survey, reveals that Halal meat products found in France are not used because of religious obligations, but instead because they’re tastier, healthier and the method used for slaughtering the animals is less painful. Basic problems which occur are different definition of Halal food. The Halal food industry is therefore trying to adapt things like food safety, animal welfare, and convenience in cooking and eating (Bonne and Verbeke, 2006). The Malaysian standard on Halal food (MS 1500:2004) meets the requirement of the international standards of good manufacturing practices and good hygiene practices and also sets some guidelines in the food industry. The guidelines advice on how to handle Halal food based on quality, sanitary and safety precautions. Halal represents animal welfare, social justice. Halal food isn’t only a concept not but it is meeting with the increasing standards in the world and also meets the requirements of the non – Muslims in the demanding market. Regardless that the Muslim population is almost 3 billion people around the world and as the stats show 60.4% of the total population of Malaysia is Muslims (Dr. Abdul Muati Ahmad, 2007). Even though most businesses in this market are focusing just on Muslims they should also study on how to attract others to purchase these products. Firms also need to employ on brand – Islamization strategies which are done on the basis of information received from the Islamic market. After gathering this information businesses can develop their organizational values and structure in order to survive in the market. Firms need to come up with a different strategy as to aiming at traditional customers. They need to consider factors such as promotions, location, quality, certification and cleanliness of operation (Nooh et al, 2007). Islam is an identifiable culture because it creates a way of life for both the people in the organization and on personal levels. The challenge here is that when you do a business in an Islamic country, there is always the fact that the Muslims have different value and beliefs compared to others in business and non – business situations. Recognizing the opportunities in the market, non Muslim multinational businesses like Tesco, McDonald’s and Nestle etc have increased their operations. 90% of the global Halal market is controlled by them. All the multinational corporations are designing programs for the Muslim consumers. To gain marketing mix standardization when applying to marketing strategies in the international markets it isn’t as easy to achieve. Standardization is only effective in identical markets, whereas adaption strategies are required in mixed markets, which differs Islamic markets from western. As for now, most of the marketing and branding decisions which have an impact on Muslim consumers are based upon the western style. Looking at marketing decision processes from an Islamic point of view are insignificant despite the fact that Halal products are being noticed differently compared to other products, and that’s because of the Shariah marketing rules. Therefore the argument in this research clarifies that in order to enter the Halal market, marketing and branding need to be looked at according to the Islamic guidelines and the standards set should be applicable within the non – Islamic market as well. Since the research requires covering and communicating with people from different countries, language can create a big barrier because not everyone can speak English. Thus they might not get the information or understand the customer as well.

1.4 Scope of the Study This study mainly targets the consumers who have the highest purchasing power. The reason for targeting these people is because these are the people who belong to the rich category or people who really keep them updated with the market in all industries. If they start purchasing Halal food then they will become the trend setters. Malaysia has the capability to become the global hub for the production and trade of Halal products and services. Mainly Kuala Lumpur because it is densely populated, consisting of 243 km and 100% of urban population. It has a better distribution of the population compared to the other cities in Malaysia. Since most of the educated people live in Kuala Lumpur, they would be more aware of the new products launched and have a better understanding why they were introduced and how can they be an advantage to the economy as well as the country itself. A survey will be conducted in the Klang Valley where 400 non – Muslim respondents were interviewed through questionnaires and to see their awareness and attitude. Descriptive statistic was used to see the socio-economic/ demographic characteristics and attitudes of the respondents. The final result summed up that the non – Muslim community was aware of the existence of Halal food, principles and benefits of Halal methods.
1.5 Conclusion Chapter 1 briefly introduces what is the topic of research, why is it being carried out and how is it going to be carried. It also describes briefly on what are the aims, objectives and the accomplishment gained at the end of this research. More details are given in Chapter 2.