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Increasing Profitability of the Halal Cosmetics Industry using Configuration Modelling based on Indonesian and Malaysian Markets

  • Dalir, Sara (University of Surrey) ;
  • Olya, Hossein GT (Director of Research for Marketing & CCI, Sheffield University Management School) ;
  • Al-Ansi, Amr (College of Hospitality & Tourism Management, Sejong University) ;
  • Rahim, Alina Abdul (Faculty of Science and Technology, Universiti Sains Islam Malaysia) ;
  • Lee, Hee-Yul (Food Service Planning & Franchise Management Department, Sejong Cyber University)
  • Received : 2020.09.08
  • Accepted : 2020.12.15
  • Published : 2020.12.31
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Abstract

Purpose - Based on complexity theory, this study develops a configurational model to predict the profitability of Halal cosmetics firms in the Indonesian and Malaysian markets. The proposed research model involves two level configurations-industry context and selling strategies-to predict high and low scores of a firm's profitability. The industry context configuration model comprises industry stability, product homogeneity, price sensitivity, and switching cost. Selling strategies include customer-focused, competitor-focused, and margin-focused approaches. Design/methodology - This is the first empirical study that calculates causal models using a combination of industry context and selling strategy factors to predict profitability. Data obtained from the marketing managers of cosmetics firms are used to test the proposed configurational model using fuzzy-set qualitative comparative analysis (fsQCA). It contributes to the current knowledge of business marketing by identifying the factors necessary to achieve profitability using analysis of condition (ANC). Findings - The results revealed that unique and distinct models explain the conditions for high and low profitability in the Indonesian and Malaysian halal cosmetic markets. While customer-focused selling strategy is necessary to attain a higher profit in both the markets, margin-focused selling strategy appears to be an essential factor only in Malaysia. Complexity of the interactions of selling strategies with industry factors and differences between across two study markets confirmed that complexity theory can support the research configurational model. The theoretical and practical implications are also illustrated. Originality/value - Despite the rapid growth of the global halal industry, there is little knowledge about the halal cosmetic market. This study contributes to the current literature of the halal market by performing a set of asymmetric analytical approaches using a complex theoretical model. It also deepens our understating of how the Korean firms can approach the Muslim consumer's needs to generate more beneficial turnover/revenue.

Keywords

Acknowledgement

This work was supported by the Ministry of Education of the Republic of Korea and the National Research Foundation of Korea (NRF-2017S1A22039266).

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