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Prof.S.Durga Rao, Dept of Management Studies, S.V.University, Tirupati.

Praveen Kumar.S, Research Scholar, Dept of Management Studies, S.V.University, Tirupati.


People are the very essence of an organization. All the technological up gradation, state of the art facilities, et al, can come to a naught if all the employees in the company are not performing optimally. It is important for employees to be engaged as much to be developed, so that their productivity is aligned with the organizational requirements. Companies need to find out indigenous ways to challenge employees so as to keep them engaged.

The Internal Marketing concept was first proposed in the mid 1970’s as a way of achieving service quality – a major problem in the services area. Its basic premise was ‘to have satisfied customers, the firm must also have satisfied employs’ and that this could be best achieved by treating employees as customers, i.e. by applying the principles of marketing to job design and employee motivation. Since then, the concept has seen a number of major developments and its application is no longer confined to the services area. It has been shown that any type of organization can use Internal Marketing to facilitate the implementation of it external marketing strategy or any other organizational strategies.

Despite the rapidly growing literature on Internal Marketing, relatively few organizations actually apply the concept in practice. One of the main problems contributing to this is that there does not exist, a single unified concept of what is meant by Internal Marketing.  However, Internal Marketing can be holistically defined as “Internal marketing is a planned effort using a marketing-like approach directed at motivating employees, for implementing and integrating organizational strategies towards customer orientation”.  

Literature Review

Pete Naude opines that Internal Marketing orientation is an area within the broader market orientation that remains relatively under-researched.

The article by Tim R.V. Davis examines the impact of consultative and participative styles of management on internal marketing. It shows how general managers, department managers and individuals can use internal marketing to increase employee involvement in reaching decisions, making commitments and taking action.

David Ballantyne explores the structural relationships through which internal marketing can create value for an organisation, its customers and its employees. It is argued that internal marketing requires a relationship-mediated approach, where planned phases of learning activity in volunteer groups generate new internally valid knowledge critical to the improvement of external market performance.

Marelise Pitt, Johan Bruwer, Deon Nel andPaul Berthon state that internal marketing is a critical issue facing marketing professions, human resources and other executives. They argue that if poor service is provided between employees it is unlikely that good service will ultimately be provided to the external customer.

Internal marketing (IM) focuses on acquiring and retaining customer-oriented employees. Critics of internal marketing claim that the term is simply a synonym for good human resources management. The concepts of internal marketing and human resource effectiveness (HRE), at both a strategic and technical level, are considered and suitable measures identified. Data collected by Michael T. Ewing & Albert Caruana  and a moderated regression analysis used to investigate the hypothesized relationships provided empirical support that there is a valid and distinct demarcation between IM and HRE, and that IM is an important antecedent to HRE.

Gould states that when information is integrated with skills, understanding and experience, it becomes knowledge which the organization can use to its advantage. His research illustrates the importance of communication processes alongside business processes to achieve continuing improvement. He concludes that many businesses should give serious consideration to the idea that HR and marketing should be combined.

Nigel F. Piercy observes that while customer satisfaction measurement is currently one of the commonest prescriptions in both the marketing and management literatures, little attention has been paid to the effects of customer satisfaction measurement, particularly in terms of the impact on the internal market, i.e. the employees and managers inside the organization. The findings of a recent study of the internal market effects of customer satisfaction measurement  identifies a number of ways in which the use of customer satisfaction information may have negative effects within the organization, which may stand in the way of the implementation of market strategies of service and quality. This suggests a management agenda which extends far beyond the acquisition of customer satisfaction data and reporting systems, to consider the full impact of such measurement systems.

Gilbert D. Harrell & Matthew in their study, Marketing services to satisfy internal customers, conclude that staff unit managers in a range of disciplines who want to serve internal publics better can effectively market their services internally by understanding and responding to internal decision processes and expectations. Moreover, internal customers will receive higher quality services if these staff functions focus their capabilities on meeting or exceeding management expectations.


Walter E. Greene, Gary D. Walls& Larry J. Schrest in their article in Journal of Services Marketing, declare that the firms that do not or will not embrace the issues of internal marketing and incorporate those ingredients into their strategic marketing plan will see their market share and profit base erode. Internal promotion can create a positive and/or superior image of the firm and its products in the mind of the customer.

The article titled, Building brand values through Internal Marketing,  shows that quality of service is central to building brand differentiation within industries that do not produce tangible products. Internal marketing is an effective way of drawing attention to service, and encouraging staff in various ways to give the best of themselves.

A paper titled, Internal brand building and structuration: the role of leadership, by Christine Vallaster & Leslie de Chernatony provides empirical insights about how change is brought about during internal brand building. It suggests that successful leaders act as “integrating forces” on two levels: integrating the elements of corporate identity structures, and mediating between the corporate branding structures and the individual.

Carmel Herington, Lester W. Johnson& Don Scott have found that competitive advantage can be attained through development of a relationship-building culture which includes building relationships inside the organization as well as customer relationships. In fact, successful customer relationships rely on successful internal relationships.

Timothy W. Aurand, Linda Gorchels & Terrence R. Bishop in the,  Journal of Product & Brand Management, have found that  employees seem to have a more positive attitude toward the brand and are more likely to incorporate this image into their work activities when there is some degree of HR involvement in the internal branding process.

Robert E. Morgan in their study Business agility and internal marketing, have found that fundamentally, the same principles which are used to market solutions to the organisation's external customers can be employed to better segment, target and position the Information Service solutions to the internal customer base.

An internal market perspective suggests where the implementation barriers may arise inside organizations in ways which directly mirror the external market. Workshop and survey information done by Nigel F. Piercy confirms the existence of powerful but hidden implementation obstacles in the internal market. This leads to the identification of a need for an internal marketing strategy for customer satisfaction that goes far beyond customer satisfaction questionnaires, to confront the behavioural and organizational barriers to delivering customer satisfaction where it matters – in the external customer marketplace.

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Status: 01. Juli 2015