INTERNAL MARKETING

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BACKGROUND The concept of internal marketing

emerged in the 1980s in recognition of the importance of internal stakeholders as a group who should receive marketing attention.

The concept developed a greater impetus in the 1990s and is becoming a major focus of attention for academics and practitioners alike today.

The term ‘internal marketing’ is accredited to Berry (1980)

PERSPECTIVES ON INTERNAL MARKETING Employees constitute an internal market in

which paid labour is exchanged for designated outputs – the popular view

Employees are a discreet group of customers with whom management interacts, in order that relational exchanges can be maintained/developed with external stakeholders – an extended view (Piercy and Morgan, 1991)

Changing role of employee: - Brand ambassador Key interface especially in service organisations

– where their actions can have a powerful effect in creating images amongst customers

PURPOSE OF INTERNAL MARKETING AND COMMUNICATION

Managers see the main components of internal marketing being within 3 main areas:- Development, reward and vision ....for employees All three components have communication as a common linkage Communication with employees and management

is undertaken for various reasons: -DRIP factors: differentiate; reinforce; inform; persuadeTransactional efficiencies: to co-ordinate actions; to

promote efficient use of resources; to direct developments

Affiliation needs: to provide identification; to motivate personnel; to promote and co-ordinate activities with non-members

ORGANISATIONAL IDENTITY

This is about what individual members think and feel about the organisation to which they belong

When their view of org. characteristics matches with their own self-concept then org identity will be strong

Org identity also refers to the degree to which feelings and thoughts about the distinctive characteristics are shared among the members.....thus there are individual and collective aspects to org identity

Brand ambassadors: - Identify closely; speak openly and positively

COMMS AND IMPACT ON EMPLOYEES

Can have positive and negative effect on employees

Can clarify roles, make realistic promises and demonstrate that the org values its employees

.....resulting in improved morale and commitment

Negative effects happen when advertising promises are unrealistic and cannot be delivered; messages are not true; roles portrayed are not flattering

....resulting in low morale, distrust and unfavourable attitude that can be seen by non-members

SUCCESS OF INTERNAL MARKETING - STRATEGIC CREDIBILITY

Strategic capability Past performance Corporate communications Credibility of CEO

INTERNAL COMMUNICATIONS: AUDITING AND PLANNING 7 key factors that influence success or

failure of internal marketing (Mahnert and Torres, 2007)Organisation InformationManagementCommunicationStrategyStaffEducation

ORGANISATIONAL CULTURE Organisational identity comes from

organisational culture Internal marketing shaped by culture as

it provides the context within internal marketing practices take place

Org culture emerges from both tangible and intangible factors: -Tangible: type of business; customers and

other stakeholders; geographical position; size, age and facilities

Intangible: assumptions, values and beliefs held and shared

ESTABLISH A SERVICE CULTURE

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Culture Shared philosophies, ideologies, values,

beliefs, expectations, and norms

Culture Shared philosophies, ideologies, values,

beliefs, expectations, and norms

INTERNAL MARKETING PROCESS Establish a service culture Development of a marketing approach to

human resource management Dissemination of marketing information to

employees Implementation of a reward and recognition

program

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Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc.

Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 12

THE SPECIFICS - DEVELOPMENT OF A MARKETING APPROACH TO HUMAN RESOURCES MANAGEMENT

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Human systems need some glue, some central theme or themes around which behaviour can coalesce.

- Katz and Kahn

Human systems need some glue, some central theme or themes around which behaviour can coalesce.

- Katz and Kahn

Developing a service culture usually means a change in management behaviour and reward systems.

Developing a service culture usually means a change in management behaviour and reward systems.

DEVELOPMENT OF A MARKETING APPROACH TO HUMAN RESOURCES MANAGEMENT (CONT’)

Creating jobs that attract good employees A hiring process Teamwork The importance of initial training Continuous training Employee involvement in organisational

choices eg uniform selection Managing emotional labour

DISSEMINATION OF MARKETING INFORMATION TO EMPLOYEES Information helps employees to solve

guest problems. Employees should hear about promotions,

new products, upcoming event and ad campaigns from management.

Organisations can communicate with their employees by employee newsletter, in-house newsletter, personal communication and technology.

IMPLEMENTATION OF A REWARD RECOGNITION SYSTEM Employees must know how they are doing

to perform effectively. Most reward systems based on meeting

cost objectives and achieving sales objectives. A few companies give rewards based on customer satisfaction.

NON-ROUTINE TRANSACTIONS

Non-routine transactions:

outstanding service

opportunities.

Empowerment

REFERENCES Berry, L.L.(1980), Services marketing is

different, Business, May/June, 24-9 Piercy, N and Morgan, R. (1991), Internal

marketing: the missing half of the marketing programme, Long Range Planning, 24(April) 82-93

Dutton, J.E., Dukerich, J.M. And Harquail, C.V. (1994), Organisational images and member identification, Administrative Science Quarterly, 39, 239-63

Mahnert , K.F. and Torres, A.M. (2007), The brand inside: the factors of failure and success in internal branding, Irish Marketing Review,19(1/2), 54-63