The Imperative of Internal Marketing


Prof. S. Durga Rao
Department of Management Studies
S.V. University

Praveen Kumar. S
Research Scholar
Department of Management Studies
S.V. University


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.

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.

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.

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.

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.

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.

Need For Further Research

* Many enterprises are continually in some form of transformation-mergers, alliances, downsizing and rightsizing generating the need for constant communication.

* Some enterprises may rename themselves as a result and this rebranding requires communication to all stakeholders including employees.

* More companies are empowering staff to take on increased focus in the customer relationship. This needs full involvement, immersion and training in brand values.

* There is less reciprocal loyalty between employer and employee; the employee's time becomes transactional .The "internal" brand can be a way to bind the two parties together with shared goals and values.

* New ways of working require organizations and staff to constantly learn new skills and sometimes these are acquired through alliances. Building a learning company will be an important future consideration. Internal brand values can be an umbrella for this effort.

However, to date, there has been a considerable knowledge gap about the components of Internal Marketing. To reinforce this point, a study by Intercommunic8 reported in Marketing week showed that 85% of companies did not even have a human resources or marketing budget for internal promotions.


Human systems need some glue, some central themes around which behavior can coalesce.                                                                                              -Katz and Kahn.

It is commonly believed that sole role of marketing is to sell products and services outwardly to customers. In fact, the first and most urgent job of marketing is often to sell inwardly toward a company's people. For, it is only when the people of the company fully understand and are committed to the value proposition of the organization and its brands that external marketing can reach its full potential.

" Marketing is absolutely critical to being internally successful,"
Stephen Norman
                                                                                     COO-Merrill Lynch's technology group


* Berry, L.L. and Parasuraman, A. (1991), Marketing Services: Competing through Quality, The Free Press, p. 152.

* Crainer, S. (1990), " Putting strategy to work", Marketing Business, October, pp. 20-1.

Drucker, P.F. (1973), "Managerial Communications in Management: Tasks, Responsibilities, Practices", Heinemann,Oxford, pp. 481-493

* Flipo, J-P. (1986), "Service firms: interdependence of external and internal marketing strategies", Journal of European Marketing, Vol. 20 No. 8, pp. 5-14.

* Gummesson, E. (1993), Relationsmarknadsforing, Fran 4 P till 30 R (Relationship Marketing. From 4 Ps to 30 Rs). Stockholm University, Sweden.

* Harrell, G.D. and Fors, M.F. (1992), "Internal marketing of a service", Industrial Marketing Management, Vol. 21 No. 4, pp. 299-306.

* Johnson, G. and Scholes, K. (1992 ), Exploring Corporate Strategy, Prentice-Hall , Hemel Hempstead.

* Mastenbroek, W.F.G. (Ed.) (1991), Managing for Quality in the Service Sector, Basil Blackwell, Oxford.

* Narver, J.C. and Slater, S.F. (1990), "The effect of market orientation on business profitability", Journal of Marketing, Vol. 54, October, pp. 20-35.

* Pervaiz K Ahmed, Mohammed Rafiq, Ahmed, "Internal Marketing: Tools and Concepts for Customer-Focused Management", Butterworth-Heinemann

Rapp, S., Collins, T. (1990), "The Great Marketing Turnaround", Prentice-Hall, Englewood Cliffs, NJ,

* Smythe, J., Dorward, C. and Reback, J. (1992), Corporate Reputation: Managing the New Strategic Asset, Century Books, London.

Prof. S. Durga Rao
Department of Management Studies
S.V. University

Praveen Kumar. S
Research Scholar
Department of Management Studies
S.V. University

Source: E-mail December 30, 2009


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