PART 2

Internal Marketing Applications

 Total Quality Management (TQM) vs IM
Basic requisite of TQM: IM is crucial in helping TQM:
Actively involving 1.Identifying and clarifying
people. Top to bottom each individual's role
(all involved) 2.Providing information &
training to enable them to
fulfil the tasks efficiently.
“For an organization to be
truly effective, every single
part must work properly
together, failure to meet the
requirements in one part /
area creates problems
elsewhere” - Oakland
“Emphasis should be on the
internal dynamics of the
organisation, recognising
that meeting the needs of
the internal customer is as
important as meeting the
needs of the external
customer’ - Atkinson
 Total Quality Management
‘. . . everyone in the organisation, from top to
bottom, from offices to technical service, from
headquarters to local sites, must play their part.’
- Oakland
Success Story:
AT&T Wireless Services used TQM to transform its call centre. Sales increased 40-
50%, turnover rate dropped 11%
 Principles of TQM
TQM starts at the top
01 In order to succeed, TQM must be
part of a company's overall business
strategy
TQM focuses on the customer.
02 Quality is based on the concept that
everyone has a customer.
TQM is process based
03 Total quality management is a
customer-oriented paradigm that
occurs through processes
TQM uses teams
04 Employee teams are part of the
‘motivational glue’ within TQM
TQM requires training for everyone
Quality is built through the skills of the
05 employees and their understanding of
what is required. Educating and training
provides employees with it.
TQM is continuous improvement.
06 Continuous attention to each of these steps
in the work process is necessary to
improve the reliability of the process and,
hence, the output quality.
Topic: Standard:
Quality Management ISO 9000
ISO 9001
Auditing ISO 19011 TQM uses teams
Employee teams are part of the
Environmental Management ISO 14000ISO 14001 ‘motivational glue’ within TQM

Risk Management ISO 31011 ISO (International Organization for

TQM requires training for everyone
Standardization)
Quality is builtisthrough
an independent,
the skills of the
Social Responsibility ISO 26000 non-governmental,
employees and their international
understanding of
what is required. Educating and training
Sampling by Attributes Z1.4 organization that
provides develops
employees with it.
standards to ensure the quality,
Sampling by Variables Z1.9 TQM is continuous improvement.
safety, Continuous
and efficiencyattention toofeach
products,
of these steps
Food Safety ISO 22000 services, and systems
in the work process is necessary to
improve the reliability of the process and,
hence, the output quality.
 TQM Success Factors - Implementation
Gurnani suggests that eight essential ingredients can be discerned in TQM implementation:

Steering committee Employee commitment

Quality policy Senior management and involvement
Programmer commitment Programmer
Steering committee Quality improvement is
It is almost a statement Strong commitment from members act out dual impossible unless it enlists
of human nature that the management is an roles of ‘quality the commitment of all
people follow policy, essential ingredient. leaders’ and ‘quality employees at all levels in
good or bad. guardians’ the organizational hierarchy

Training and Standards and Reward and

Communication
problem-solving tools
Effective and efficient two-
Training provides a way communication
common language and a channels are a
common set of tools to prerequisite of any quality
be used in the firm. improvement programme.
measurement
It is essential to have
criteria for measuring
progress towards the
overall aims of the
Company.
recognition
Recognising people
means informing
individuals that their
efforts are being
Appreciated.
Internal Marketing Role in TQM & Marketing
Internal marketing as interface agency
The internal marketing-led quality diamond
Internal marketing works on getting quality by:
paying attention to
 Examples of TQM Failures
Douglas Aircraft. The company started its TQM
programme by training 8000 employees using a
2-week programme and spent additional time
preparing the workplace for the implementation
of a TQM programme. Two years later, the
company found it was no better off than before
the programme.
Bell Helicopter Textron held a 36 per cent share
of the new helicopter sales market worldwide.
The company recognised the increasing need for
quality and trained over 3000 people in TQM
during the next few years. By July 1992, Bell had
not realised any benefits from the programme. In
fact, the company's share of new helicopter sales
declined to 20 per cent.
Wallace Co., an oil field supply company, filed for
bankruptcy protection shortly after it had won the
Malcolm Baldridge National Quality Award.
According to CEO John W. Wallace, many of the
personnel within the organisation were too busy
making quality presentations after winning the
1990 award, and were not able to devote the
necessary time to generate new sales.
British Telecom launched a quality programme in
the late 1980s. The company is still attempting to
recover from being bogged down in quality
processes and bureaucracy. The company failed to
focus on customers and began to dismantle most
of its quality bureaucracy
 Reasons of TQM Failures

 * Reorganisation with no real reason, causing damage to people, processes and profit.
 * Obsessing over winning a quality award is always the wrong goal.
 * Collecting data on every piece of the processes is wasteful and expensive.
 * Customer satisfaction measurement is often overdone.
 * Wasting time, effort and money when all employees are trained in SPC.
 * Workers solve non-consequential problems, thus productivity suffers because TQM places all
employees above management.
 * When management is removed from the process of TQM, the sole focus shifts to the process.
 Innovation and Internal Marketing

New Product Development Innovation Benefits

New products are central to • Reduced product development costs
corporate growth and prosperity. • Time to market
An estimated 40 per cent of sales • New product advantages
come from new products..

“It’s war: innovate or die”

 Evolution of Innovation Process

The first-generation The second and Fourth and fifth-generation The sixth and
innovation process third-generation innovation innovation process seventh-generation
(1950s to mid 1960s) Process (mid 1960s to early (early 1980s to early 2000s) innovation process
1980s) (early 2000s to present)
 Internal Marketing’s Role Innovation
The following areas are directly or indirectly affect a company's success or failure in innovation:

Organisational Culture & Leadership People

Deep-seated beliefs and basic assumptions . The creative engine of innovation.

Structure, Process & Context Core Competencies

IM is uniquely placed to maintain/modify a company's
Can be used to examine hierarchies, processes etc. culture

Employee Communication Integration

Critical in highly cross-functional Innovation is dependent on the input

of all relevant viewpoints and arguments.
 Problems at Innovation
Unsupportive Top Management
Lack of commitment from top management
strongly dampens innovation

Inadequate Resources
Poor Decision Policies & Planning
Shortage of resources (time,
Poor decision making hinders
money, people)
innovation

Not Knowing the Customer Lack of Cooperative Behaviour

Lack of market research making the Problems in project management
organisation unsure of customer needs cover areas such as competitive
behaviours within the innovation portfolio.
Knowledge Management
 Knowledge Management (cont’d)
With the development of the global economy, knowledge management and learning (KM&L) has risen
to higher prominence

Knowledge Organisational Learning

Knowledge is the source of
competitive advantage, because it
is a vessel of human experience
and insight capable of potential
action..
Organisational learning is a process
in which an organisation's members
A B actively use data to guide behaviour
to adapt with the organisation’s goals.

C D
Change Management
Intangible Assets Change and learning reinforce
Individual skills, know-how, each other. Change tends to
relationships and contacts add invalidate known answers and so
value and generate wealth. demands
continuous learning.
 ‘I am my position’ ‘The enemy is out Illusion of taking
(the manager or there’ (when the true charge (when
employee who places enemy is almost proactivity is really
loyalty to the job invariably ‘inside’ ‘reactiveness’ in
before loyalty to the the organisation). disguise).
firm –

Barriers of
‘functional myopia’).

Learning
   Delusion of learning
Fixation on events from experience (is The myth of the
Barriers to learning or disabilities rather than processes. commonplace because management ‘team’.
are an ingrained part of all we rarely directly suffer
organisations. Common barriers the consequences of
that can debilitate the transition many of our decisions;
into a learning organization are: there is usually a
separation between
decision and
consequence, allowing
us to live the delusion
that learning has taken
place).
Different Types of Knowledge Management
Over time, many different varieties of knowledge management have appeared on the scene (Binney, 2000).
Internal Marketing & Knowledge Management
Ballantyne links knowledge management and internal marketing by first
putting forward two methods of internal marketing:
1    Transactional marketing (aiming to satisfy customers’ needs profitably)
     (a) To capture new knowledge.
     (b) To codify knowledge.
2    Relationship marketing (aiming to create mutual value with customers or
other stakeholders)
     (a) To generate new knowledge (through cross-functional project groups,
creative approaches, innovation centres, quality improvement teams, etc.).
     (b) To circulate knowledge (through team-based learning programmes, skills
development workshops, feedback loops, etc.).
Matrix of Internal Marketing Activities
In terms of learning, Ballantyne proposes four distinct modes as the following:
 Initiating KM and Learning
A simple template for initiating a knowledge management and learning programme
is given below as a set of steps.

Step 1
01 Organizing for KM must start off with education and training for top and
upper level managers. This prepares the ground for the sharing of
knowledge thinking and getting the entire organization involved.
Step 2
02 Mapping the company's intellectual capital and competencies against
strategic demands made by the external environment.

Step 3
03 To formulate a knowledge and learning policy, and put it forward in an
understandable and sufficiently concrete form to guide daily operations.
Top managements’ deep commitment is required.

04 Step 4
Communicate a clear vision for the firm.
Initiating KM and Learning (cont’d)
A simple template for initiating a knowledge management and learning programme
is given below as a set of steps.

Step 5
05 Develop a business language, or lexicon, with shared meanings and
nuances to foster generalized understanding of strategic goals.

Step 6
06 Put in place structures and systems to facilitate multidirectional flow of
knowledge throughout the organization to meet employee
requirements.
Step 7
07 Put in place assessment frameworks to ensure behaviours are aligned
to desired actions.

08 Step 8
Act on feedback to align the company to strategic goals.