Management practices referred as internal marketing

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The term internal marketing concept first had its origin in the mid 1970s. It was formed as a management approach to improve the service industry to achieve better quality service and to maintain competency. The concept of internal marketing propels that 'to have satisfied customers, the firm must also have satisfied employees'. Thus it mainly focuses on the idea that employees of the organisation, especially in the service sector need to be considered as the customers of the organisation for the total quality management. Thus it preaches that by considering employees like the customers of the organisation, by motivating them and thus satisfying them through various management practices, the all over performance of the organisation can be improved.

Since 1970s, it has been seen as a management practice. It has undergone various changes and its scope has broadened that it is no more confined to service industry alone. Internal marketing has been used by all types of organisation that helps them to carry out its external marketing practices or any other organisational strategies. But despite of all these developments, it has not been implemented in many leading organisations.

Key concepts of internal marketing include:

Internal marketing functioning as a continual internal 'up skills' process.

Alignment of the organisation's purpose with the employee behaviour.

Employees internalising the core values of the organisation.

Employee motivation, reframing, and empowerment of the employee attitude.

Inside-out management approach.

Retaining a positive customer relationship throughout the business objectives.

Features of internal marketing.

The following are the features of an internal marketing - oriented business:

Development through employees:

The employees in the organisation are encouraged by the management by giving them freedom to be more innovative, creative, by allowing incentives, accountability, and allotting responsibility for various tasks which helps them to encourage in themselves a feeling of sense of belonging.

Participative hiring:

Participative hiring ensures the participation of the currently working employees in the organisation in the recruitment process. It is the involvement of existing employees in the organisation to carryout the selection and recruitment of new employees. It helps to access the new employees with the right potential since the existing work force are well aware of the criteria of the job and assess the personnel who best suits into the job.

Recognition of employee performance:

Employees with excellent and out standing performance should be recognised and should be rewarded accordingly.

Extending staff support during difficult times:

The problems and grievances that the employees face in the organisation on a personal level should be understood and fair treatment should be given

(for instance the death of a family member). It can be done by raising a special fund

Benefits of internal marketing:

Internal marketing encourages the internal market that is the employees to perform efficiently.

Internal marketing empowers the employees and gives them the accountability and responsibility.

Internal marketing creates a sense of belonging among the employees.

Internal marketing helps the employees to understand the nature of the business, aims and objectives.

Internal marketing encourages employees to serve the customers by rewarding and appreciating the valuable contribution for the successful running of the business.

Internal marketing helps the non-marketing staff to understand the marketing aspects and work in a marketing-like manner.

Internal marketing improves customer retention and individual employee development.

Internal marketing integrates business culture, structure, human resource management, vision and strategy with the employees' professional and social needs.

Internal marketing creates good cooperation and coordination among the various departments of the organisation.


Pervaiz .K Ahmed and Mohammed Rafiq have also clearly differentiated the two major internal marketing models by Berry's and Gronroos which has not been clearly mentioned by many other authors. Though both these authors have aimed at improving service quality, the models vary in the way of doing it.

The distinguishing factors:

Internal marketing model by Berry:

The major considerations of Berry's model are as follows:

The main emphasis is on the fact that when the employees are considered like the customers in the organisation, they would develop a sense of belonging which would intern helps them to perform their task in a much better way. This adds the quality of the service offered by the organisation and helps it to achieve competitive advantage among its competitors.

By treating the employees like customers, the organisation is trying to view the work done by the employee as a product offered to the customer. Thus internal marketing involves making the job attractive to the employees just like making a product attractive to the organisation.

Considering employees as customers of the organisation requires a different approach from the Human resource practices. Thus internal marketing is the application of the marketing techniques to the internal customers (employees) not only to get them but also to retain the organisation- committed employees.

Berry's Model of internal marketing.

Motivation as a management practice that drives performance improvement:

There are several theories related to motivation though the implication of all theories almost remain the same. Gary Dessler in his work human be 'Human behaviour - improvement at work' states that the term "motivation" is a simple at the same time a much sophisticated term. In one sense, motivating is quite easy to find out what a person really desire or wish for and providing it as the incentive. But it is complicated to find out what an individual really craves for because the wants and needs of human beings vary extensively. The incentives or rewards that an organisation may hold for motivating its employees may be ineffective to motivate them if they feel it is worthless or inadequate. Even when there are complications with regard to motivation, every organisation has to manage it appropriately because motivation is the end product of management.

(Pranay purohit, 2004) as well as (dessler) mention the Maslow's Hierarchy of needs. He viewed human needs in a hierarchical form from the lowest to the highest. Abraham Maslow, a psychologist categorised the basic human needs into five as physiological, safety, social, ego and self actualisation needs. He states that an individual craves for a particular need in the hierarchy only when the lowest level need in the hierarchy is satisfied.

Abraham Maslow's Hierarchy of needs.

The basic needs discussed by Maslow :

Physiological needs.

These needs include the fundamental needs of every human being such as food, water, shelter, rest etc. Maslow states that once if these needs are satisfied only, an individual shows an instinct to attain the other needs in the hierarchy.

Security needs.

Once when the basic needs are satisfied, the individual tries to attain more security and safety. He tries to resist job, property and other facility loss.

Acceptance needs.

Once after satisfying the physiological and security needs, these needs will not tend to motivate the individual. They need affiliation, relationships, attachment and a sense of belonging.

Ego needs.

These needs include power, reputation, prestige, esteem, admiration, respect etc.

Self- actualisation needs (SA).

Maslow considers self-actualisation need as the highest in the hierarchy. Here the individual tries to attain what he or she is capable of becoming.

The motivation- hygiene theory by Frederick Herzberg modifies the hierarchical theory by Maslow. it states that various factors related to the work such as the management, salary, safety, working conditions etc are not motivators in the real sense and that the high availability of these factors avoids merely dissatisfaction and that they cannot be treated as motivational factors. He mentions that new challenging roles, rewards, appreciation, acknowledgement, career development as real motivators.

In a study conducted to find the internal market orientation (IMO) on the application of internal marketing practices and employees job satisfaction, it was found that the job satisfaction is absolutely related to the practice of internal marketing. This study is mainly to depict the fact that IMO is a very important factor in determine the employees job satisfaction and states the need of having an Internal Market Orientation before implementing the internal marketing practices.

The major internal marketing principles are as follows ( Berry et al.,1976)

Every organisation should consider the needs of its employees before sorting the needs of its customers.

The various company policies and systems applicable to the external.

Leadership and internal marketing communication.

According to Ahmed and Rafiq, the top level management in an organisation plays an important role. Their decisions are very significant indication in supporting implication. The way they act and make necessary arrangements for the implementations of various programmes gives support to knowledge management. The actions and decisions of the top management helps to resolve resistance facilitate sharing of ideas and boost all the activities that improve learning. They can initiate a positive learning cycle, implant new ideas and notions through a process of materialisation and internalisation. This leads to the generation of action.

The positive implementation cycle.

The figure shows the progress of learning through materialisation, internalisation, support, communication, and other practical activities. In this positive cycle, there is a transformation from ideas into action in the implantation of knowledge management thinking. Here learning is the source which helps to generate new ideas and new thoughts. When it is applied to an organisational implementation, learning takes place through the various stages of materialising ideas, internalising ideas and concepts, gaining support to this idea, preparing a plan of action and which ultimately leads to action. Ahmed and Rafiq states that this positive implementation cycle with its four states acts as an ideal outline for a cyclical learning process. When the employees' tale part in the continuous organisation-wide training programmes, they get the idea of knowledge management and thus resistance to change that the organisation faces slowly stoops down. During this time, employees can also learn new ways of performing the tasks. The authors state that the mental integration of the employees helps to increase the involvement and participation and thus the implementation process becomes a success.