Table of Contents
Abstract:-............................................................................................................................1
Introduction........................................................................................................................2
Objective of research:-.....................................................................................................3
Research Question:..........................................................................................................4
Research Design Detail:..................................................................................................4
Literature Review..............................................................................................................4
Theoretical frame work:-.................................................................................................8
PROBLEM STATEMENT:...........................................................................................10
Hypothesis of Study:-....................................................................................................10
Methodology for Research:-...........................................................................................10
Data collection Methods:...............................................................................................10
Population & Sample:....................................................................................................11
Data collection:..............................................................................................................12
Data Analysis:................................................................................................................12
Result and interpretation detail:-...................................................................................13
Regression Table...........................................................................................................13
Hypothesis analysis:-.....................................................................................................14
Conclusion:.......................................................................................................................16
Recommendation:............................................................................................................16
Acknowledgement:...........................................................................................................17
Appendix...........................................................................................................................19
Abstract:-
Internal marketing’s main focuses is to acquire and retain customer-oriented employees.
A development-oriented economy requires organizations to attract and retain customers
to ensure a sustainable competitive advantage. To achieve this aim, organizations must
focus their efforts on developing and sustaining an organizational culture that emphasizes
internal customer well-being as a means to attract and retain external customer. This
paper explores the relationship between internal marketing and external marketing. We
propose that in order for firms to undertake successful marketing activities in dynamic
business environments, employees must be willing to offer the required effort to adapt
rapidly and fluently to external environmental change. Based on the literature in internal
marketing and external marketing, we propose a model that relates five key internal
marketing practices to external marketing that build customer satisfaction and loyalty.
Key words: internal marketing practices, external marketing, customer satisfaction.
IntroductionMarketing is the business function which identifies customer needs and wants,
determines which target market the organization can serve the best and designs
appropriate products, services and programs to serve these markets. So we can say that it
is a philosophy that guides the entire organization. The goal of marketing is to create
customer satisfaction by profitably. The marketing department can not accomplish this
goal by itself, it must co-operate closely with other departments in company and partners
with other organizations throughout its entire value delivery system to provide superior
value to the customer. Organization gain market leadership by understanding customers
through superior value. Marketing is not something to satisfy customer but also
employees. Before going to explain the affect of internal marketing on external
marketing first we would like to define these two terms. Internal marketing is a process
which trains, motivates and empowers employees at all management levels to
consistently deliver a satisfying customer experience. External marketing is the forces
outside of an organization that control a market. So we can say that internal marketing is
within the organization and external marketing is outside the organization. Internal
marketing focuses on employee’s motivation to provide superior value to the customers.
If customer is satisfied with the company’s product, it means that company’s marketing is
good for making profitable relationship. If company is weak in internal marketing. It
cannot achieve its major objectives that are profit maximization through sales marketing.
The main aim of this study is to investigate which internal marketing practice effect
external marketing. The research subjects consist of employees in banks at Blue Area
Islamabad of management level.
Object ive o f research : -
The core objectives of this study are given as follows;
First objective of this study to get insight that "how internal marketing of any organization
influence on externalities of that organization".
Second to know how the employee job satisfaction effects on external marketing.
Organizational commitment helps to improve externalities of an organization.
Mostly external market is affected by organization's loyalty.
Most of the external factors affect the trust on management issues.
Research Quest ion :
We want to describe “Which internal marketing factor effect strongly external
marketing”?
People influenced and discarded any organization; we explore the underlying causes of
these problems caused.
Research Des ign Deta i l :
In this research we use cause and effect study so regression analysis supports this
study as research design. We calculate multiple regression coefficient to analysis our
research in order to quantify the result for the purpose to estimate the assumptions.
Multiple regressions allow examining the effect of factors effecting on outcomes. In this
study, in order to test the mentioned hypothesis, all of the internal marketing factors
selected in this research like job satisfaction, organizational commitment, organizational
loyalty, trust on management and internal communication have been summed up and then
multiple regressions has been run with these as independent variables and external
marketing as dependent variable.
Literature Review This research is all about the marketing strategy of a company. This strategy is divided
into two parts internal marketing and external marketing. Internal marketing is attracting,
developing, motivating and retaining qualified employees through jobs that satisfy their
needs. The satisfaction of employees strongly influences by the quality of services
extended to external marketing that satisfy to customers. Both have direct impact on
company’s success. Those companies who run their programs more efficiently by
providing different benefits to their employees are successful in external marketing.
According to Berry (1981) Employees are internal customers in internal marketing are
just like external customers. Internal customers would like to have their needs satisfied.
The reason is that by satisfying the needs of internal customers, an organization will be in
a better position to deliver the quality desired to satisfy external customers. By fulfilling
the employee needs enhances employee motivation and retention and also employee
satisfaction, the higher the employee satisfaction generates external satisfaction and
loyalty. So we can say that internal marketing enhance employee motivation, creativity,
innovation and performance. Internal marketing is often connected with customers and
sales people as a goal to get as loyal customers. According to Cowell that Internal
marketing is a management approach which enables and motivates all members of the
organization to understand their role and to satisfy their customers by providing them
high quality services
The basic way to achieve employee satisfaction is treating employees as customers. The
company should recruit those employee who are highly motivated, customer oriented and
sales minded. Employees also need the right type and the level of training to perform
their jobs. This can help to reduce uncertainty surrounding their role and help employees
to meet the needs of customers more effectively.
According to Bansal et all (2001) that internal marketing can improve the organizational
commitment and job satisfaction when employee job satisfaction is enhanced, employees
adopt a positive attitude when serving external customers, a situation that can help to
enhance customer loyalty.
So we can say that firms can use internal marketing activities to transmit organizational
vision and goals to employees. Through the design and implementation of human
resource management systems for internal marketing, internal marketing is available to
enhance employees' job satisfaction, motivate employees to achieve organizational goals
and promote employee perceptions regarding organizational commitment.
Internal marketing is based on the considering that no single organization function is
effective if it operate in individually. Multi operations and people with different skills
have performed activities in creating and delivering products and services. These cross-
functional activities and the people who perform them have major influence upon the
outcomes. In today’s world, managers must ensure that all the workers are actively
involved in the delivering high quality products.
According to Barnes, (1989) that the loyalty of customer is based on the service
satisfaction, however it requires the collaboration and commitment of employees.
Employees commitment to the organization and their effort towards the achieving
organizational goals or in other words we can say that employees loyalty build customer
loyalty. Employee commitment affects the external marketing factors. Encouraging the
employees to buy their own services and products, this can increase the sales and
confidence for external customer.The key aims of internal marketing are the development
of internal and external customer awareness and the removal of functional barriers to
achieving organizational effectiveness. Employee motivation is also very important, and
it can be done by giving incentives or rewards to them
According to Heskett, Jones, Loveman, Sasser, and Schlesinger (1994, pp. 164–165),
Profit and growth are primarily achievable by customer loyalty. Loyalty has a direct
relationship with customer satisfaction. It is largely influenced by the value of services
provided to the customers. Satisfied, loyal and productive employees create value.
Employee satisfaction, in turn, results primarily from high-quality HR practices that
enable employees to deliver results to the customers. It is clear that the success of
external marketing of a service organization is dependent on the success of how well it
markets itself internally.
According to Barnes & Morris, (2000), Morrison, (1996). Internal marketing practices
mean to retain the most qualified and skilled workers, because these are the assets of any
organization. If the employees are satisfied they can better take care of the external
customers and high quality customer satisfaction is derived by internal employee’s
loyalty. If the internal structure of any organization is strong, it will defend the external
factors.
A successful internal marketing process produces highly motivated and well-trained
customer-support employees, who always do the right things first in the right way, and
perform the right behavior when treating their customers. Employees with flexible nature
are the need of today’s competitive environment. Marketers have to concentrate on the
internal market as much as on the external market, if they want marketing plans and
strategies to be successfully and effectively implement within their organization.
Therefore, it is very important to build the right and appropriate internal environment to
build strong customer relationship. If the internal structure of the organization is standing
on strong bases, like employee satisfaction that organization can satisfy their external
customers easily.
After studying the articles, we seem that for the success of external marketing, internal
marketing is very important. In internal marketing we found five independent variables
like job satisfaction, organizational commitment, trust on management, organizational
loyally and internal communication. Now we will see how these variables impact on
external marketing.
Theoret i ca l f rame work : -
Dependent Variable:
External marketing is the dependent variable.
External Marketing:
It represents the whole externalities of an organization like expectation for job or carrier
or for services provided by the organization when people come to an organization in
order to use its provided services and get satisfied. External marketing plays an important
role in the success or failures of an organization. If a customer is satisfied from the
organizational services then behaviors would be positive towards the organization.
In dependent variables:
Following are the key factors of internal marketing used in this research study
Job Satisfaction:
We use the following question for job satisfaction. 5 -I always look ahead to go to work .6 -I enjoy doing my work .7 -I have natural inclination to my job . -Overall I am satisfied with my job. 8
Organizational commitment:
We use the following question for Organizational commitment.
9 -Our organization is sincere with employees .10 -This organization has a great deal of personal meaning for me .
11 -I would be happy to spend the rest of my carrier in this organization .12 -For solving problem your organization likes to have discussions.
Trust on Management:
We use the following question for Trust on Management.
13 -I trust on my organization’s management .14 -Management generally solves my personal problem .
15 -Management is friendly with the employee .16- In case of problem, I feel free to contact with management.
Organizational loyalty:
We use the following question for Organizational loyalty.
17 -This organization deserves my loyalty .18 -I feel strong belonging to this organization .19 -I believe in the value of remaining loyal to this organization. 20 -The recognition given for effort/good work .
Internal communication:-
We use the following question for internal communication.
21 -Our organizational goals are clear to all employees . 22 -Our organization offers employees a vision that they can believe in .
23 -Our organization communicates to employees to improve their service roles.24- Our organization emphasize on effective communication with employees.
PROBLEM STATEMENT:
“Impact of Internal Marketing on External Marketing.”
Employees and customers are the main focus of this research study; we explore the
causes and its effect when they go for an organization for job or as a customer. The
external marketing is productive when it is in the favor of customers.
Hypothes is o f S tudy: -
In order to investigate the effects of internal marketing factor on external marketing and
importance of these factors. The following research questions have been proposed:
Which internal marketing factor effect strongly external marketing? Also the set of
related hypothesis have been formulated to link the factor of internal marketing to
external marketing as follows:
Ho: External marketing effected through internal marketing
HI: Job satisfaction has positive impacts on external marketing.
H2: Organizational commitment has positive impacts on external marketing.
H3: Trust on management has positive impacts on external marketing.
H4: Organizational loyalty has positive impacts on external marketing.
H5: Internal communication has positive impacts on external communication.
.
Methodology for Research:-This research study is cause and affects study so; we used regression analysis
which is a statistical tool through which we learn about which factor influence strongly
on external marketing.
Data co l lec t ion Methods :
The data used for this study were obtained from basically these sources.
Observation
Secondary data
Primary data
Analysis
Conclusion
statiscal tool can be found the most suitable mean for the research of this study, which
can lead us a better understanding for the research problem. To understand the main idea,
it can be very helpful to use the statistical analysis to see the impact of independent
variable on dependent variable.
Populat ion & Sample :
For getting the data for research we select the banking sector because banking sector
provide a lot of benefits and facilities to their employees just to ensure their customer
satisfaction. There are several reasons for selecting this sector. One of reason is to
choosing these groups is that banking people have some knowledge about internal and
external marketing and also convenient to collect and analyze the data.
Sample is 100 people of management level employees in banks of five different age
groups. They are divided among different target groups to find out the attitude towards
external marketing.
We categorized the people into five age groups:
Under 25
26-35
36-45
45-55
56 and Above
Data co l lec t ion :
We design the questionnaires for the purpose of data collection. It is important for this
research to use multiple sources of data to get the most possible wide view about this
research.
We also use the secondary data because it is relatively cheap and quick to obtain, and
also reliable and accurate. We collect the articles and gain the information through
internet. We apply the statistical tools such as means, regression. We find the results
through statistical tools.
The major data for the work were collected by means of structured questionnaires.
One hundred copies of questionnaires were distributed in the banks of BLUE AREA
Islamabad
Data Ana lys is :
We use the secondary data because it is relatively cheap and quick to obtain, and also
reliable and accurate. We collect the articles and gain the information through internet.
We apply the statistical tools such as means, regression. We find the results trough
statistical tools.
Result and interpretation detail:-For results and their interpretation we use regression analysis in order to calculate
accurate results.
Regress ion Tab le .
Regression Statistics
Multiple R 0.400838727
R Square 0.160671685
Adjusted R Square 0.116026562
Standard Error 0.723797359
Observations 100
Observation was 100
In above table our multiple regression is R = 0.40 or 40%
The value of regression coefficient is R2 = 0.16 or 16%
And adjusted R2= 0.116 or 11.6%
Stander error is SE= 0.724 or 72.4%
Hypothes is ana lys is : -
On the behalf of regression coefficient we accept or reject our alternative hypothesis
again null hypothesis.
Ho: External marketing effected through internal marketing
Our Ho is positive and grater then 1.Any hypothesis which are positive it is accepted and
strength of acceptance is shown with its value that how much it effected on Ho.
Now we check that which alternative hypothesis is accepted or rejected against null
hypothesis and its reason.
H1: Job satisfaction has positive impacts on external marketing.
H1 is accepted against Ho because it is positive and it is more then zero. Its present age
of effect is 33% which means that job satisfaction affects the external marketing with the
percentage of 33.so we accept h1 because it shows that job satisfaction has positive
effects on external marketing. The reason for this factor effect is that employees are
satisfied with their jobs. The reason may be work load, timing, culture or compensation
and punishment if something commit against rules and regulation of organization
H2: Organizational commitment has positive impacts on external marketing.
H2 is also is accepted against Ho because it is positive and it is more then zero. Its
present age of effect is 17% which means that Organizational commitment affects the
external marketing with the percentage of 16.so we accept H2 because it shows that
Organizational commitment has positive effects on external marketing but its effect is not
as stronger as job satisfaction. The reason for this factors weak effect is that employee are
not as much committed with their jobs they just do job in order to earn not do job as duty.
The reason may be environment of organization or discomfort while working
organization
CoefficientsIntercept 2.062019399
X Variable 1 0.324776329
X Variable 2-
0.167702218X Variable 3 0.133301676X Variable 4 0.015770825X Variable 5 0.13889048
H3: Trust on management has positive impacts on external marketing.
H3 is also is accepted against Ho because it is positive and it is more then zero. Its
present age of effect is 13% which means that Trust on management effects the external
marketing with the percentage of 13.so we accept H3 because it shows that Trust on
management has positive effects on external marketing but its effect is not strong as
compare to job satisfaction. The reason for this factors weak effect is that employee has
not strong trust on their upper man agent. If in organization there is some problem or an
employee get in problem employee are not rushed to share with management for solving
the problem may be they are scare of file from job.
H4: Organizational loyalty has positive impacts on external marketing.
H4 is also is rejected against Ho because it is negative and it is less then zero. Its present
age of effect is 17% negatively which means that Organizational loyalty effects the
external marketing with the percentage of 17 but negatively. So we reject H4 because it
shows that Organizational loyalty has negative effects on external marketing but its effect
is strongly negative as compare to job satisfaction. The reason for this factors effect is
that employee are not loyal to organization. If they get a good job they leave the
organization. Reason behind this is mostly wrong person for wrong job and not awarded
satisfactory compensation against job.
H5: Internal communication has positive impacts on external communication.
H5 is also is accepted against Ho because it is positive and it is more then zero. its
present age of effect is 14% which means that Internal communication effects the
external marketing with the percentage of 14.so we accept H5 because it shows that
Internal communication has positive effects on external marketing but its effect is not
strong as compare to job satisfaction. The reason for these factors weak effect is might be
autocratic leadership style use in the organization.
Conclusion:Internal marketing in is acknowledged as an important activity in developing a marketing
oriented organization. Fundamentals aims of internal marketing are to develop internal
and external customer awareness and eliminate functional barriers to organizational
efficiency. While spending more time doing marketing internally will produce more
knowledgeable and dedicated employees who will, in turn, seek the goal of providing
excellent services to customers. This study also identifies a positive relationship between
internal marketing and external marketing.
This study did not cover the opinions of customers, only opinions of managers and
employees are covered about customers. Customers were neglected in this study. Another
draw back was that only five independent were analyzed for studied not all variables
were studied.
Recommendation: From the research we seem that external marketing is positively correlated with internal
marketing. So managers need to pay significantly more attention to the communication of
marketing and other organizational strategies and objectives to employees so that they
understand their role and importance in the implementation of the strategies and
achievement of marketing and organizational objectives. It ensures that employees are
highly motivated and customer oriented and also provides employees with the right type
and level of training to perform their jobs is very important. The organizations should
also pay attention on the quality of products because customer satisfaction is based on the
quality of products.
Acknowledgement:In the name of Allah, the most merciful and the most beneficent. First of all we are
grateful to our ALLAH almighty who awarded us blessings for such effort and also to our
holy Prophet Hazart Muhammad PBUH who introduced the light of knowledge in
darkness of ignorance. We also like to thank our parents who encouraged us and also to
our companions and friends who gave their suggestion where we were on the wrong way.
We extend our deepest gratitude and profound regards to Mr. Arif Vaseer and Mr. Saqib
who remain a source of inspiration for us through their guidance and teaching. Esteemed
appreciation and recognition to our friends, colleagues and family for their support and
encouragement throughout this endeavor
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Appendix External marketing
1 -Our customer is fully aware of given service .2 -Media is creating strong influence on buying behavior of our customers.
3- Marketing tools plays effective role for organizational goals .4 -This organization has achieved its objective through marketing .
Job Satisfaction :
5 -I always look ahead to go to work .6 -I enjoy doing my work .7 -I have natural inclination to my job . -Overall I am satisfied with my job. 8
Organizational commitment :
9 -Our organization is sincere with employees .10 -This organization has a great deal of personal meaning for me .
11 -I would be happy to spend the rest of my carrier in this organization .12 -For solving problem your organization likes to have discussions.
:-:Trust on Management
13 -I trust on my organization’s management .14 -Management generally solves my personal problem .
15 -Management is friendly with the employee .16- In case of problem, I feel free to contact with management.
Organizational Loyalty :
17 -This organization deserves my loyalty .18 -I feel strong belonging to this organization .19 -I believe in the value of remaining loyal to this organization. 20 -The recognition given for effort/good work .
Internal Communication
21 -Our organizational goals are clear to all employees . 22 -Our organization offers employees a vision that they can believe in .
23 -Our organization communicates to employees to improve their service roles.24 -Our organization emphasize on effective communication with employees .
19
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