Internal Marketing in Services Marketing

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1. Introduction

The aim of the following essay is to present the importance of internal marketing in service product development. The first part of this essay will discuss the origin and growth of the concept of internal marketing. Then it will focus on the benefits of internal marketing. In the later part, it will demonstrate a specific case, Mary Kay, which has successfully implemented internal marketing.

It shall first briefly introduce fuzzy sets and related concepts. The concept of internal marketing originally emerged from the services marketing literature (Berry and Parasuraman, 1992). The term internal marketing is defined as the policy of treating employees as internal customers of the organization, responding to employees’ needs or wants and promoting the organization and its policies to the employees. Customer service is one of the most crucial aspects of an organization’s competitive advantage and it is the critical element which internal marketing influences, whatever business or industry the organization operates. Employees are the backbone of any business success and the service employee often represents the organization in the eyes of the customer, therefore, they need to be educated, motivated and maintained in organization at all cost to support the business or industry to be globally competitive.

The internal marketing concept is based on two assumptions. Firstly, every employee has his or her own customers in the organization. These customers are so-called internal customers. Secondly, employers need to treat employees as final customers and enjoy providing benefits and services for them, so as to satisfy them, and then, this will result in delivering better services to final customers in effective and efficient ways (Grönroos, 1990a, p.8). Therefore, it is important for employers to apply the marketing strategies and tools used for external and/or final customers to the internal customers. Internal marketing is the crucial strategy and tool.

2. The origin and growth of the concept of internal marketing

In the process of emergence and development of internal marketing, the market environment was still in the stage of changing from seller’s market to buyer’s market. Marketing activity campaigns were transferred as product or service from the production department to the consumers. It is not surprising that internal marketing was only regarded as a tool of communication within organizations. Meanwhile, the implementation of internal marketing was hindered and restricted by separated business functions because of phase limitations and unsystematic related research; its power could not be fully exploited. With the significant change of economic environment which business and industries rely on, particularly the formation of buyer’s market, business and industries have actually become a ‘big marketing department’, marketing has become a core business strategy.

The internal marketing concept emerged and has been developed in literature since the 1970s. A number of firms have gradually recognized and utilized the internal marketing program; one possible reason for this is that “internal marketing is considered a prerequisite for successful external marketing” (Grönroos, 1990a, p.8). In addition, several authors claim that implementing IM campaigns will result in an increase of service quality. Essentially, internal marketing focuses on engendering marketing-oriented management. Internal marketing has become a separate task, representing the co-ordination of a range of disparate activities in many cases.

3. The benefits of implementing internal marketing

An internal marketing strategy can grow an organization’s business in a competitive marketplace and make sure that customers have a positive experience at every touch point with the organization. Enormous researches have revealed evidence that organizations with strong internal marketing program experience higher growth rates and...
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