Group Members:

Kanwal Mahar
Abdul Rehman
Muhammad Ali
Class:
BBA IV (A)

Submitted to:
Madam Sanam Mahar
Subject:
Methods of Business Research
Date:
09-06-2015
 Internal Marketing: A key to external marketing success

Abstract:
The following research focuses on key relationship between internal marketing, Job satisfaction,
Customer orientation, Relationship marketing and organizational performance. The survey from
100 employees of different banks result indicated that there is strong relationship exists in
internal marketing, Job satisfaction, Customer orientation, Relationship marketing and
organizational performance. The findings focused on the importance of the relationships existing
between salesperson skills, training, organizational commitment, job satisfaction, and
salesperson customer orientation. The administration of the survey was personally administered
but self-completed. In addition research reflected that the customer base and profitability also
increase if internal employees are satisfied.
Introduction:
Internal marketing simply refers to the employees of an organization. It was firstly used by
Berry et al. (1976) and then by George in (1977) and Thompson et al. (1978) and Murray (1979).
According to Berry (1981), internal marketing means treating employees as customers and
offering training programs to them so that companies can increase job satisfaction and thus retain
staff. One purpose of implementing internal marketing is to motivate and satisfy employees
(Bouranta, Chitiris, & Paravantis, 2009; Rafiq & Pervaiz, 2000), who would feel satisfied at
receiving internal marketing campaigns, as well as greater opportunities for self-actualization
and self development (Rafiq & Pervaiz, 2000). It is the marketing practice through which we
came to know that if our employees are satisfied then there will be customer orientated sales.
Customers will be entertained well in terms of services. All businesses are working towards
identifying the best marketing practices or tactics to satisfy customer needs. However, most
businesses spend more money acquiring new customers than they do keeping existing customers.
For that purpose most of the companies or firms are trying to build up an environment to keep
their customers loyal and make new customers as well. They used to give trainings to their
employees so that if employees will be satisfied then ultimately firm will be at competitive
advantage. It has also been suggested that relationship marketing is beneficial to firms because it
can foster customer loyalty and repeat purchase behavior (Shani and Chalasani, 1992). Customer
orientation is valuable because it focuses the organization on continuously collecting information
about customers’ needs and then using this to create greater customer value.

Literature Review:
As far as the term internal marketing is concerned, it was firstly used by Berry et al. (1976) and
then by George in (1977) and Thompson et al. (1978) and Murray (1979).
We posit that internal marketing bestows lots of benefits to organization in terms of strong
customer base and profitability as well. Secondly good internal marketing strategies positively
affect the customer satisfaction. Additionally there is a positive impact of a salesperson’s work
satisfaction on customer satisfaction. Rewards must be given to the employees who achieve the
targets resultantly job satisfaction will increase (Conduit & Mavondo, 2001).Internal marketing
means giving trainings, rewards and recognition to the employees in order to retain the staff
(Berry 1981). Through this customers will be loyal to the company.Andrew in 2004 has said that
rewards and recognition increases the employees’ commitment. Employees having affirmative
attitude then his her job will have positive commitment and job satisfaction which will raise the
organizational performance (Payne & Webber, 2006; Rafiq & Pervaiz, 2000). Internal marketing
campaigns bring motivation among employees. Employees who are motivated can make
organization competitively more value added and profitable (Rizwan Qaiser Danish 2010).
Internal marketing campaigns bring motivation among employees. And Employees, who are
highly committed, will be able to provide quality services to the customers and then, customers
will increase their purchases .In the end profitability will increase.Furthermore,Puffer (1987) and
Smith,Organ,and Near (1983) showed work satisfaction to be positively related to prosaically
behaviors, including helping behaviors, in organizations. Authors argue that customer contact
employees are pivotal in forming a customer’s level of perceived service quality (e.g., Kelley,
1992; Parasuraman, Zeithaml, & Berry, 1991).According to Saxe and Weitz (1982), customer-
oriented behavior is defined as the ability of salespeople to help their customers by engaging in
behaviors that increase customer satisfaction.
Additionally, salespeople’s customer-oriented behavior has been shown to positively affect
overall customer satisfaction and willingness to buy (e.g., Baker et. Al., 1992; Goff et al., 1997;
Spreng, Harrel, & Mackoy, 1995). Hoffman and Ingram (1992) look specifically at the
relationship between employees’ work satisfaction and the employees’ customer-oriented
behavior.Based on social exchange theory, these authors argue that salespeople’s work
satisfaction will lead to customer-oriented behaviors. Hartline, Maxham, and mckee (2000) state
that customers often base their impressions of the firm largely on the service received from the
customer contact employees.
The management needs to run internal marketing campaign in order to achieve all strong
customer base, profitability, customer satisfaction and competitive advantage. Employees must
have support of their management. When employees have support of their management or
employers, they perform better because employees’ needs are fulfilled through employers’
support (Michel et al., 2010).One of the objectives of internal marketing is to make personnel
more motivated and customer focused (Gronroos, 1981). Therefore, companies have to provide
some trainings so that employees may understand customer orientationsInternal marketing
simply states that employees are internal customers. It views jobs as products and satisfy the
needs and wants of these internal customers while addressing the objectives of the organization
(Rafique and Ahmed 2000). The customer-satisfaction/business success relationship is often
attributed to the positive relationship that exists between customer satisfaction, customer loyalty,
word-of-mouth and profitable sales volume (Anderson & Sullivan, 1993; Fierman, 1994;
Reichheld & Sasser, 1990; Reynolds & Arnold, 2000). Internal marketing is said to be a
philosophy that focuses on customer satisfaction and also helps enhancing organizational
productivity through constant improvement of employees’ performance and their working
environment (Ahmed and Rafique 2003).
Internal marketing enhances customer satisfaction because it works towards actions, interactions
and adaptations that strengthen customer satisfaction. Therefore, quality enhancing behavior
become a reflexive part of employee actions. Ahmed and Rafique in 2003 came to the conclusion
that “such environment and accompanying quality enhancing behavior by internal customers are
formulated as a fundamental source of competitive advantage”. Additionally internal marketing
positively affect the profitability ratio (Isil Turkoz & Ayse Akyol, 2011).Internal marketing is
also positively related to customer ratio. Additionally internal marketing is positively related to
handle customer wants and arguments as well (Isil Turkoz & Ayse Akyol, 2011).

MODEL
 Internal Marketing

Customer Orientation Job Satisfaction

Relationship Marketing

Organizational Performance

Hypothesis:
1. Internal Marketing bestows organizations lots of benefits i.e. strong customer base.
2. Internal marketing positively affect the Profitability of an organization.
3. Good internal marketing campaigns positively affect the customer satisfaction.

Methodology:
After all the discussion and reviewing literature we have developed a 30 item questionnaire
about internal marketing, job satisfaction, relationship marketing and customer satisfaction. The
first three internal marketing, job satisfaction and relationship marketing are measured through
5-point Likert scale (ranging from 1= strongly agree to 5= strongly disagree). Employees are
asked about the behavior of managers, supervisors with them, working conditions, benefits and
bonuses, communication between them and with their boss, promotions and recognition. And the
last portion of Questionnaire is about customer satisfaction in which we are asking question from
customer that either they are satisfied or not with the quality or experience they got from the
services of the organization, and this portion is -also measured through 5-point Likert Scale
(ranging from 1= very poor to 5= superior ). 150 Questionnaire were distributed and 100
responded and result showed there is positive relation between internal marketing, Job
satisfaction, Customer orientation, Relationship marketing and organizational performance.

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