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Internal marketing is one of the management strategies to ensure that high service quality if delivered to the company's customers. It is the opposite of external marketing wherein the management is concerned about the satisfaction levels of their employees, their customers and whether any current management strategies need to be changed or modified. More often than not, the initial phase of internal marketing focuses on the motivation and satisfaction levels of the employees of the company. This is due to the fact that the main reason why internal marketing is needed in the first place is so that it can develop and improve the quality of service being provided to the customers. It so happens that the employees themselves are very much a part of delivering a certain quality of service. However, it must be noted that all employees are not consistent in their performance levels, and such inconsistencies may result in variations with the quality of service being exhibited or delivered. Secondly, internal marketing also focuses on developing customer orientation. There is a need that any management or marketing strategies implemented by the company is responsible to their needs (Ahmed & Rafiq, 2002).
Gudmundson & Lundberg (2010) says that the main purpose of internal marketing is to encourage all members of the organization (especially those who are directly involved in service encounters) to improve their performance levels. In fact, the main goal of the entire internal marketing process is to make sure that the organization is able to put suitable employees into higher positions, such as managerial positions. In addition, the aim of the process is to also improve the retention rate among all staff members, plus encouraging the employees to be more customer oriented.
According to Grönroos (1994), in order to encourage customers to patronize a certain product or service by the company, it is important that the company does not just focus on the interactions that take place between the buyer and the seller. It is also important that the actual interactions that take place provide the company with the opportunity to market their organisation. Therefore, there is a need for managers to train their employees to be both 'sales minded' and 'customer oriented.' The third stage of internal marketing, as was mentioned, pertains to the implementation of management strategies and bringing about change within the organisation. The key to making an organisation successful is to make sure that the tasks being performed by all the members of the organisation fit well with the objectives of the company. In the same process, it is also important that the employees are able to understand and recognize the reason behind strategy implementation and the need for changes (Ahmed & Rafiq, 2002).
2.0 Principles of internal markets
Varey & Lewis (2000) mentions that there are three principles of internal markets. In any organisation with the intention to conduct internal marketing, there is a need to:
Change the hierarchy of personnel and instead convert them into 'internal enterprise units.' In this context, instead of simply having different departments within the company, these are replaced with 'internal enterprises,' that are part of the entire internal market system. Therefore, all enterprises are held accountable for their performance, and they are also given more control over the tasks that they have to achieve, just like an external enterprise. Once internal enterprises are able to hold alliances with other internal enterprises, corporations are able to establish form a global economy.
Creating an economic infrastructure that would be used in order to help in the decision making process. Under this second principle, executives are in charge of designing and regulating the infrastructure of the organisation's economy, in the same way that the governments manage the economy of the nation. This principle also means that the management is responsible for encouraging the establishment of different business arrangements. Examples of these are venture capital firms, distributors and etc.
Companies have to provide leadership in order to encourage teamwork within all the members of the organisation. In an internal economy that fosters teamwork, activities include the solving of problems as a group and the sharing of technology.
3.0 Internal Marketing Strategies
Berry & Parasuraman (1991) believe that when a company practices internal marketing strategies, and the strategies being practices are effective, the company will find itself:
Competing for talent in a more aggressive style than before.
Offering a vision for its employees to have a definite purpose to come to the workplace.
Provide the employees with sufficient knowledge and skills so that they can achieve their tasks in the best way possible.
Being able to establish relationships among employees and it also allows all staff members to benefit from each other.
Being able to 'leverage the freedom factor,'
Measure performance levels and reward good performance exhibited.
Being able to 'base job design decisions on research.'
Khosrowpour (2004) mentions in his paper that many companies in the dotcom sector have failed in the past because of their lack of marketing strategies. Managers working in a dotcom company usually do not understand that in order for their company to survive, there is a need for 'sound prices, costs and profits relationships.' There are also some managers who do not place too much importance on the acquiring of customers and increasing their loyalty. Consequently, companies that do realize the importance of loyal customers spend too much on keeping their customers, and even more so, encouraging their loyalty. With the focus being on internal marketing, one of the reasons why many dotcoms have also failed is because there is not so much attention being paid to human resource management. In fact, from the very beginning of the recruitment process, managers fail to hire employees that are competent and efficient enough to contribute to the company's development.
4.0 How companies exhibit internal marketing
There are three of the most popular and most used websites on Cyberspace, namely Facebook, Google and Yahoo! and how each of these companies exhibit internal marketing within their organisation.
One of the most popular social networking websites of today is Facebook, which was founded by Mark Zuckerberg, and his fellow students Eduardo Saverin, Duston Moskovitz and Chris Hughes, while all were still studying at Harvard University. At first, membership to the website was only limited to students studying at Harvard, but it later expanded to include other university students, high school students and soon, everyone who had access to the internet, and had valid email addresses. At the moment, the website has around 400 million users all around the world and this number continues to grow. The website allows its users to connect to each other by allowing them to add friends, send messages, post content (whether they are photos or videos). The friends of a user would also be able to get notifications about the activities of other users, and all users also have access to all sorts of applications, mainly for the purpose of entertainment. Therefore, users can also play games with other users (Sarah, 2008). The website is basically free for the users, but it is able to generate profits by hosting advertisements. When it comes to hosting such banner advertisements, Microsoft is actually the website's exclusive partner (Facebook.com, 2010). Based on a marketing research study conducted by conScore, Facebook collects the same amount of data from its visitors in the same way as Google and Microsoft does. However, Yahoo! is still at the top, collecting more data than all the websites just discussed (Story, 2008).
The concept of 'enterprise social software' refers to the usage of social software within a business organisation. This involves social and networked modifications to the company's intranets and other software platforms that are used in order for companies to organisation their communication. Companies in both the public and the private sector are actually trying out these tools, and they also try to find ways wherein they can create business value and improve the level at which the employees are engaged with their work. Previously, companies have exhibited a 'command and control' approach when it comes to the management of the technologies that they use. In a company, the information technology (or IT) departments have the responsibility of making sure what people have access to what products. This is not always seen to be a positive thing in the eyes of some employees who feel that they should have access to some technology that they also have access to when they are at home. The usage of Facebook is a perfect example. Since social software is mostly free, more and more employees tend to experiment with new tools even without the knowledge of their organisation (Marfleet, 2008).
It has been suggested that one of the best ways through which Facebook can practices its internal marketing strategies would be to first examine the culture and the leadership being exhibited by the company and its staff members. This has to be done in order to determine how the employees behave. The leader and founder of Facebook, Mark Zuckerberg, has been reported to not always provide the community with what it wants or expects. In fact, there have been reports saying that the Facebook headquarters is very much similar to a dorm room, which employs young employees (Owyang, 2009). In this context, it seems that Facebook has a lot of catching up to do in terms of assessing their internal marketing strategies.
When it comes to dealing with the employees and helping to improve their performance levels, Facebook founder Mark Zuckerberg believes that the behaviours of human beings can be influenced by the incentives with which they are given. The same belief is also what Zuckerberg practices, and he feels that employees will only work harder if they are motivated enough. Since there are different employees working for different departments, all employees need different incentives to help improve their work performance. The engineering department for example, can be expected to work better if they are provided with the best products to build with. Business executives who are also part of the company may be motivated even more with incentives that come in the form of finances. In addition to such incentives, Zuckerberg has also come up with a compensation scheme that's unlike other companies in the IT sector. This is because other companies usually follow the scheme of providing their employees with a 'single set of stock options.' This means that although the employee is entitled to a bonus if he/she performs well, it is impossible that the stock option funding will be increased. However, in Facebook, if employees do well in their assigned tasks, they have the opportunity to increase their stock option count in a year and a half 'refreshing cycles.' The only major condition is that managers have to 'force rank' the staff members. In other words, if the employees are not ranked well enough, they would not be entitled to the incentives due to them and the compensation scheme as described (Marshall, 2009).
Google was first launched in the year 1996. Its founders are Larry Page and Sergey Brin, both of whom were students studying at Stanford University at the time. In fact, Google was first part of a student project, named the Stanford Digital Library Project (or SDLP) at the time. The aim of the project was to develop technology in such a way so that it forms an 'integrated and universal digital library.' In the beginning, it received its funds from the National Science Foundation, in addition to funding being provided by other federal organisations. Google actually got its name from a typo 'googol,' which actually means a number that is represented by 1 and one hundred zeroes following it. It was in the late 1990's when Google began to attract followers, who frequented the website in order to conduct their Internet searches. One of the reasons why they were attracted to Google was because of the simple design of the website itself. In the first few years of the 12th century, to this day, Google started to sell its advertisements that are linked to 'search keywords.' In order to maximise the speed of the webpage loading, the ads were ensured to be presented as text, so the presentation in itself is uncluttered. Google basically sold keywords by combining both the price and the number of clicks that other websites received. For instance, per click that a website receives entitles Google to $ 0.05. When Google started to become a household name, other dotcom competitors were losing their share of the Internet market, therefore making Google one of the world's leading companies to this day.
According to Pappalardo (2008), Google's internal marketing system is just as important as the products and services that it offers to its consumers. Despite Google being a large company, its own company culture and atmosphere is still relatively small and does not fit with its size. Through its tools and services, Google intends to make the world a smaller place, by connecting its consumers. Since the company does not discriminate and it continues to expand, it has been very successful in becoming one of the top search engines in the world. Another reason why Google has also been successful is because it focuses first on its internal marketing process instead of marketing externally. Of course, the latter is also important, and the success of Google lies in the fact that it offers its services to a cause that will benefit the whole world, through the help of information and technology. Aside from being a search engine, the company also supports and initiates projects that aim to search and develop more renewable energy sources that help make the environment even healthier. One such example is Recharge IT, which helps to cut down carbon dioxide emissions (Pappalardo, 2008). Another popular and successful project that the website has launched would be Google.org, wherein the company can practice philanthropy. The main objective of Google.org is to make sure that issues such as global warming, public health and poverty are all addressed to (Hafner, 2006).
Yahoo! is one of the leading companies that provide Internet services all over the world. It was first founded by David Filo and Jerry Yang in the year 1994, and at the moment, the chief executive officer of the company and a member of the company's board of directors is Carol Bartz. It is actually the oldest brand being presented in this passage, and its best known for being a search engine. However, it also hosts a number of services for its consumers such as Yahoo! Mail, wherein its consumers can gain access to their emails, Yahoo! News, wherein the consumers can read the latest news about any subject online, Yahoo! Video, wherein consumers can upload and share their videos with the public, Yahoo! Directory, wherein consumers can communicate with their contacts. Other products also include Yahoo! Messenger, Yahoo! Finance and Yahoo! Groups. Yahoo! Mail has in fact, been considered to be the largest email service in the world, gathering almost half of the world's market share. Yahoo! Mobile, on the other hand, is a new service, but nevertheless taking the world by storm. It basically allows its consumers to gain access to their email, their instant messenger and their blogs with the use of the mobile phones. They can also gain information from their phones, and they can also search for new information and acquire other alerts as well (Yahoo Investor Relations, 2009). In January 2010, Yahoo! has been named as possessing the world's market share when it comes to displaying advertisements online. The percentage of Yahoo! in the US market is actually 17 percent, making it ahead of Microsoft (which follows it) at 11 percent and AOL, which managed to gain at least 7 percent of the US market share (comScore, 2008).
When it comes to internal marketing, one of the perfect examples of how Yahoo! exhibits its internal marketing strategy is by establishing the Yahoo! Employee Foundation, which was founded in the year 1999. This organization is actually one that is non-profit and focuses on utilizing the time, the talent and skills of the employees in order to serve a variety of communities all around the world. Of course, in order to carry this out, there is also a need for Yahoo! to contribute its financial resources to the organisation. However, all these finances are contributed by the employees themselves, and all the activities are done voluntarily. Basically, the organisation allows the employees to practice their leadership skills, by using them in community services. Some of the events being supported by the Yahoo! Employee Foundation include Habitat for Humanity, Classroom Buddies (where employees volunteer at schools), and Rebuilding Together (For Good, 2010).
From this assignment, it can be seen that all three companies operate in a different way despite belonging to the same sector in the IT industry. Facebook, one of the most popular social networking websites in the world today, conducts its internal marketing by focusing on the needs and wants of their employees. Zuckerberg, the website's founder, believes that in order to improve the behaviours of their employees and improve employee performance, there is a need to identify the needs and wants of a certain employee according to his line of work within the company (Marshall, 2009). Google, on the other hand, focuses on exhibiting corporate social responsibility within the organisation, in the hopes that this could influence the behaviours of their employees to improve their work performance. For instance, Google has decided to participate in a variety of programs that help save the environment, and the company also promotes philanthropy to other charities and non-profit organisations, with the intention that the proceeds go to a good cause. The company believes that by exhibiting such good behaviour, the employees are likely to follow suit (Pappalardo, 2008). Yahoo!, the oldest of all the websites previously mentioned, believes that by allowing their employees to form and operate other projects that are not necessarily related to the company, employees are able to work on their leadership skills. Such leadership skills may indeed be useful towards the improvement of the company's operations, since the employees are better prepared to undertake more complex and demanding tasks.
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