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Chapter 10 - An Introduction to Internal Marketing

Chapter 10 - An Introduction to Internal Marketing

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Published by: charisma_dim4581 on Oct 01, 2009
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09/30/2009

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Chapter 10An Introduction to Internal Marketing
“In a service organization if you are not serving the customer, you had better be servingsomeone who is.” – Jan CarlzonOutline:I.Internal Marketinga.Employee Satisfaction and Customer Satisfaction Are LinkedII.The Internal Marketing Processa.Establishment of a Service Cultureb.Development of a Marketing Approach to Human ResourcesManagement-The Importance of Initial Training-Managing Emotional Labor c.Dissemination of Marketing Information to Employeesd.Implementation of a Reward and Recognition SystemIII.Nonroutine TransactionsThe words internal marketing is not new to you…we have discussed this duringthe first few weeks of classes...remember the triangle?...I hope you do.Internal marketing is critically important in a service industry. The uniquecharacteristics of service, specifically the characteristic of INSEPARABILITYemphasizes that employees are part of the product. Problems arise when bothemployers and employees are not aware of this fact, focusing only with what is tangible,like how food products should look and taste like, or how linens should be properlyfolded, etcetera…etcetera.
Although I’m not saying these aren’t important…but theseare things that would NOT generally translate into SATISFIERS…these are things thatwould just remove dissatisfiers. Remember herzberg’s two factor theory, stating that theabsence of dissatisfiers is not enough, satisfiers must be actively present to motivatepurchase. Yes, theories are applicable in real life…if you decide to choose and makethe topics discussed in class interesting…look for ways on how you can apply it to youpersonally…it will help you remember and appreciate theories, that can sometimes be atad boring. Hmmm…anyhow…I think by now, you’re already familiar with the company Southwest Airlines…having a competitive advantage, focus and low cost, are just two of the reasons thatmade Southwest Airlines the ‘hottest thing in the sky’. The officers and CEOs of thecompany stated that processes can be imitated but what make their competitiveadvantage SUSTAINABLE are its people.Go back to the illustration we had on the dynamic relationships amongstakeholder groups in a high-performance business. Stakeholders’ satisfaction
 
basically stems from EMPLOYEE SATISFACTION, remember the arrows…and Iremember you all agreed with this argument, no doubt that it’s agreeable…right?Internal marketing has two benefits: customer satisfaction and employeesatisfaction. One is more dependent from the other…which is it?Employee satisfaction and customer satisfaction are linked. Studies have shownthat a direct relationship exists between employee satisfaction and customer satisfaction…it’s a never ending cycle (as if there is such a thing as an ending cycle??)…and if you’re company is breeding dissatisfied employees
dissatisfiedcustomers
increase in employee dissatisfaction
increase in customer dissatisfaction…the cycle goes on and on and on…until you, as a manager interveneand stop the decaying cycle that will probably lead to your company’s demise.A study was also conducted as to the relationship between employee turnover and customer satisfaction…also a direct relationship exists…increased turnover is awarning that the company is not customer focused.I don’t need a study to tell me this…because I’ve experienced it firsthand …although a study such as what was conducted would heighten the fact that company’smust indeed look at an increase in employee turnover as a warning sign of an increasein customer dissatisfaction.An increase in employee turnover is a very critical and reliable indicator of employee dissatisfaction…businesses not belonging to the service industry may survivethis ‘feat’…but I think a service industry where employees are part of the product wouldnot last long if an increase in employee turnover will not be looked into as somethingthat would drastically affect business’ performance.…to make ‘internal marketing’ more precise and systematic (and more bearable
)…Kotler (author of various management books) came up with an internal marketingprocess that involves the following steps:1. Establishment of a service culture2. Development of a marketing approach to human resource management3. Dissemination of marketing information to employees4. Implementation of a reward and recognition systemESTABLISHMENT OF A SERVICE CULTURE, ‘easier said than done’…culture is notsomething you can change overnight…you need a miracle for that.
It is a processthat must be continuously monitored and continuously strengthened…I think you cannever have enough of a ‘service culture’…(TQM105)Establishing a service culture should not be limited only to ‘servers’…lineemployees. Support from management is important; the irony is that…managers areusually given incentives based on quantitative achievements, such as increases inprofits and decreases in costs…the belief that service quality is dependent only on
 
short-term quantitative terms can most probably result to short-term operations…andthis should not be the case.A strong culture helps organizations in two ways:1. it directs behavior;2. gives employees a sense of purpose and makes them feel good about their companyInitiative from employees is important…a strong sense of commitment is neededto provide customers/clients the best service that they need. Policies should not limitemployees to act according to what they think is best for the company, proceduresshould not be prohibitive, that employee initiatives are curtailed, and reward systemsshould hinge NOT ONLY on increases in profits or decreases in costs but on factorsthat encourages a service culture.A strong service culture empowers employees to make decisions, thus, settingup common values and norms is more critical and more important (therefore…harder)than setting rigid procedures, policies, rules and guidelines. Although rules,procedures, etcetera are important for a firm to be organized…managers should focusnot just merely on controlling people/employees but motivating and encouraging them tothink beyond these rules, et. al. and improve them as needed.A conventional organizational structure emphasizes on a top-down approach…employees exists in a hierarchy, where employees are used to ‘just doing the job’ just toplease those ‘above’ them or their immediate supervisors. Do you think an organizationwith this perspective has a strong service culture?Therefore, the word marketing is not just about advertising…promotions…or thetypical definition one would link ‘marketing’ to. Marketing goes beyond externalmarketing…and this would entail implementing different marketing strategies to a firm’semployees.DEVELOPMENT OF A MARKETING APPROACH TO HUMAN RESOURCES MGT.How would a firm do that?Creating jobs that attract good people – the same concepts apply on knowingone’s customers, knowing what their needs and wants are and providing them withthose needs and wants. Thus, it is important to know who your ‘target’ employeesare…knowing what factors would want them to work for you. Wouldn’t it be nice to workfor an organization you know only hires the best in the industry.Service organizations need to hire for attitude and train for skills. (no need toexpound on this…otherwise I can get emotional again…jk)

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