Strategic Marketing Internal Marketing (IM)

Strategic Marketing Internal Marketing (IM)

Internal Marketing (IM)

Dr. Paula Stephens

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Learning Objectives

To understand why internal marketing is an important part of the marketing programme

To understand why it is important to have a company where everyone is focused on serving the customer.

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“In a service organisation, if you are not serving the customer, you had better be serving someone who is.”

 

Jan Carlzon (Chief Executive, Scandinavian Airlines)

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Definitions of internal marketing

IM is about building customer orientation among employees by training and motivating both customer contact and support staff to work as a team (Kotler & Armstrong 1991)

 

IM is a process by which employee satisfaction is leveraged to positively impact the bottom line. Satisfied employees strengthen relationships among all critical stakeholders (Williams, Business & Economic Review, 1997)

 

 

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The above slide provides definitions for Internal Marketing. In general Internal marketing is an inward facing marketing process that follows a customer point of reference through an effective involvement of employees capabilities towards customer contact.

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What does this tell us about the culture of an organisation operating an IM strategy?

 

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Is telling us that the organization has adopter a service’ culture.

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Establishment of a service culture

An organisational culture is the pattern of shared values and beliefs that gives members of an organisation meaning, providing them with the rules for behavior in the organisation

A service culture is a culture that supports customer service through policies, procedures, reward systems, and actions.

 

 

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Corporate culture of an organization is the pattern of shared values, beliefs, and rules or patterns of common behavior in the organization. A service culture implies type of organizational culture that promotes kinds of behavior in its employees that leads to high concern for serving its customers.

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Upside down organisational structure

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Graphical illustration of the differences among conventional and service-oriented organizational structure. As you will see the service oriented organizational structure focuses on the organizational teams and places customers as the initial step for focus. While on the other hand the conventional organizational structure focuses on the individual employees and places customers to the last step of the diagram.

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Internal marketing is a means of involving staff at all levels in effective marketing programmes by enabling them to understand their role in the marketing process

Internal marketing programmes consist of training and staff development, effective internal communications, and integration schemes, designed to enhance knowledge and understanding of the overall marketing orientation within the organisation.

Internal Marketing

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Internal marketing involves employee development trough a number of trainings, integration schemes in order to enhance knowledge for a better understanding of their individual role. Internal marketing is when organizations think of their employees as their first market – their internal customers. It’s when all employees are customer-oriented and work together as a team, no matter who their “customers” are in the organizational marketing process.

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Key concepts of IM include:

IM functioning as a continual internal up-skilling process

Alignment of the organisation’s purpose with employee behaviour

Motivation, reframing and empowerment of employee attitude

Inside-out management approach

Retaining a positive customer experience throughout the business objectives.

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The above slide identifies the key concepts of Internal Marketing such as frequent development of skills, enhancing employee behavior in association to business objectives and purposes, enable employee motivation and empowerment for reaching the desirable working attitude, and finally maintain a positive customer experience all the way through organizational objectives.

Lastly Internal Marketing is an inside-out management approach that looks closely how internal organizational resources (i.e. staff) may respond the marketing needs of the target market.

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The role of internal marketing

Management of change: – IM may be used to gain acceptance of new systems such as the introduction of IT and new working practices

Building Corporate Image: – IM’s role is to create awareness and appreciation of the company’s aims and strengths as all employees are potential ambassadors

Strategic Internal Marketing: – which aims at reducing inter-departmental and inter-functional conflict and developing the co-operation and commitment needed to make external marketing strategies work.

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The above slide outlines the role of internal marketing in three different business levels such as Management of changes, Building Corporate image, and strategic internal marketing.

Management of change: – Internal marketing may enable a smooth transition to change by making the acceptance more easily. Internal marketing is an important ‘implementation’ tool. It aids communication and helps us to overcome any resistance to change.

Building Corporate Image: – Since we are considering each employee as an ambassador of the organization the role of the Internal Marketing is to develop awareness and appreciation of the company’s objectives. This help to reinforce a company-wide image.

Strategic Internal Marketing: -Internal marketing is an important element of the strategic internal marketing as it promotes and develops the commitment as well the co-operation of all related parties towards the effectiveness of external marketing strategies.

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Benefits of Internal Marketing

IM encourages the internal market (employees) to perform better

IM empowers employees and gives them accountability and responsibility

IM creates common understanding of the business organization

IM encourages employees to offer superb service to customers by appreciating their valuable contribution to the success of the company.

 

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The above slide identifies the benefits of the use of Benefits of Internal Marketing. In general Internal marketing enables a better employee’ performance, enhance employee’ empowerment, accountability and overall responsibility of their behavior, develops a better understanding of the organizational purposes and goals, enable employees to identify their role towards the business while serving customers.

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Benefits of Internal Marketing, cont.

IM improves customer retention and individual employee development

IM integrates business culture, structure, HRM, vision and strategy with the employees professional and social needs

IM creates good co-ordination and co-operation among departments of the business.

 

 

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Also, Internal Marketing improves the customer retention as well employee’ personal developments, incorporates all organizational elements towards employee’ professional and social needs, and lastly, initiates a healthy, pleasant as well productive collaboration among business’ departments.

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Management approaches to successful IM

Managers should lead by example and set high standards of customer relations and job effectiveness

IM sets individual goals that lead to the achievement of successful organizational goals

Consistency in actions and words in all dealings with internal and external customers.

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For a successful Internal Marketing, different management approaches need to be adopted such as:

Managers should lead by example and set high standards to different dimensions

Each individual goals must be aligned to the achievement of organizational goals

Good consistency and uniformity in word while dealing to customers

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Problems affecting successful implementation of IM

Managerial incompetence in interpersonal, technical and conceptual skills are some of the stumbling blocks

Poor understanding of the IM concept

Individual conflict and conflict between departments.

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The above slide identifies different problems that affect or influence the effective implementation of Internal Marketing such as: Managerial lack of skill in interpersonal, technical and conceptual skills of employees, employee’ poor understanding of internal marketing concept, different individual employee’s conflict and conflict between departments makes the implementation of internal marketing difficult,

inflexible organizational structure attached by bureaucratic leadership influences negatively the success of internal Marketing, ignoring and not listening to subordinate staff may raise difficulties to the effective implementation of Internal marketing, the degree of ignoring employees’ importance and treating them like any other tools of the business also raises difficulties to the effective implementation of Internal marketing, Unnecessary protection of information against employees also prohibits the effective implementation of Internal marketing, Finally, employee resistance to change makes the internal marketing implementation dificult.

 

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Problems affecting successful implementation of IM, cont.

Rigid organisational structure and bureaucratic leadership

Ignoring and not listening to subordinates

Resistance to change

Poor communication.

 

 

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(stated in previous slide)

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Trends of Internal Marketing Communications

Few companies develop a strategy

Failure in over 80 percent of cases involving announced change

Biggest symptom of failure – lots of inaccurate, negative rumors

Second major symptom – learning about change from press

Management does not adapt message to different groups

Great differences between literal meaning, intention and effect of overly positive messages

 

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Communication is an important element of success for internal marketing. The above slide outlines different trend to internal marketing communication such as inaccuracy, bad rumors, lack of message adoption to different groups, misconception of messages, and informing about change through other parties such as press.

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Developing IM Programmes

Market definition: in terms of formal and informal lines of communication and authoritative power

Market Research:

Employee attitudes towards the organization

Levels of job satisfaction

Assessing skill and knowledge needs

Needs and wants of employees.

 

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For developing Internal Marketing programs different considerations must be identified through market research such as the assessment of the job satisfaction levels of the employee, the attitudes that employees held towards the organization (bad attitudes may raise difficulties to the development of IM Programs), reliable communications lines with formal and informal usage, the evaluation of employees skills and knowledge across the organizational tasks and goals, as well the current needs and wants that shared among employees.

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Developing IM Programmes, cont

Market segmentation: to ensure effective, accurate and appropriate targeting of IM efforts. Bases for segmentation determined as a result of market research

Marketing action: selection and implementation of appropriate marketing activities to achieve optimum IM success. Better internal communications and teamwork and employee empowerment are aims of IM.

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For the effectiveness of internal marketing effort a market segmentation could be the outcome of the market research towards the development of IM programs. Following the IM program development a marketing action requires the selection and implementation of the marketing activities, however for this step a clear internal communication as well team collaboration may empower the ultimate goals of Internal Marketing.

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Developing IM Programmes, cont

Marketing Communication: Accurate and timely spreading of marketing information internally and externally. Participation should be encouraged in achievement of personal and organisational goals. In-house magazines, regular team briefings and better two-way communications

Marketing orientation: marketing objectives and vision must be made clear to all employees and clearly defined individual goals set to enable employees to see their individual contribution to achieving the organisation’s objectives.

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Additionally, the effective development of Internal Marketing Program is also based on marketing communication which indicates the accuracy of transmitted information both internally and externally of the organization. Therefore a two way communication as well active listening must be encourages and promoted towards the success of individual and organizational goals.

Also the development of IM programs relies heavily on the marketing orientation that indicates that the pre-planned marketing objectives and vision are clearly stated and are fully understandable by all employees. This may assist employees to clarify and clearly see the importance of their contribution towards the achievement of organizational objectives.

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Implementing the Plan

Implementing IM programmes can be achieved through co-operation between top management in the organisation and functional managers.

It requires a flexible approach which will lead to an internal environment which is both committed to organisational goals and responsive to changing organisational needs.

The changing needs of employees must also be taken into account.

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The implementation of Internal Marketing programs requires the collaboration of the up-level management and functional managers. Also flexibility is an important elements which may lead to a better commitment and alignment of changing organizational needs and adaptation as well taking into consideration the employees’ changing needs who are crucial elements of the Internal Marketing.

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Implementing the Plan

Marketing audit

Marketing analysis

Objective setting

Strategy development

Designing action programmes

Assigning responsibility for their execution

Monitoring and controlling the plan: staff performance and appraisal.

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The implementation plan of Internal Marketing programs may be achieved through:

Marketing audit: A marketing audit is a comprehensive, systematic, independent, and periodic examination of a company’s or a business unit’s marketing. It is designed to evaluate marketing assets and activities in the context of market conditions, and use the resulting analysis to aid the firm in planning.

An audit should cover both an analysis of the external situation facing the firm and a thorough review of internal marketing goals, strategies, capabilities, processes, and systems, and should result in actionable recommendations for the firm.

Marketing analysis: A marketing analysis is a study of the dynamism of the market. It is the attractiveness of a special market in a specific industry. Marketing analysis is basically a business plan that presents information regarding the market in which you are operating in. It deals with various factors.

Objective setting: The process of identifying and setting the goals that need to be achieved

Strategy development: Identify and define the steps which enable your to achieve the goals. This is a strategy development based on pre-planned actions and it is related to employees’ work involvement.

Designing action programmes: Determine how you will formulate your strategy in order to achieve the pre-determined goals.

Assigning responsibility for their execution: Divide responsibilities and allocate roles to individuals who are responsible for each task execution.

Monitoring and controlling the plan: staff performance and appraisal: Observe and manage the plan progress by staff’ working performance and appraisal (evaluation/ assessment).

Strategic Marketing

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