Marketing for Hospitality and Tourism Kotler, Bowen and Makens Internal Marketing Chapter 10

Learning Objectives Understand why internal marketing is an important part of a marketing program. Explain what a service culture is and why it is important to have a company where everyone is focused on serving the customer. Describe the three-step process involved in implementing an internal marketing program. Explain why the management of nonroutine transactions can create the image of being an excellent service provider.

Internal Marketing Internal Marketing involves marketing to the firm’s internal customers, its employees The Moment of Truth occurs when employees and customers have contact Marketing in the hospitality and travel industries must be embraced by all employees; it cannot be left to the marketing or sales department Marketing must be part of the philosophy of the organization, and the marketing function should be carried out by all line employees The skill, motivation, and tools employed by the firm’s representative and the expectations and behavior of the client together create the service delivery process Managers must make sure that employees know their products and believe they are a good value The employees must be excited about the company they work for and the products they sell Otherwise, it will be impossible for the guests to become excite

Internal Marketing Process Establishment of a Service Culture Development of a Marketing Approach to HR Dissemination of Marketing Information to Employees Internal marketing ensures that employees at all levels of the organization experience the business and understand its various activities and campaigns in an environment that supports customer consciousness The objective of internal marketing is to enable employees to deliver satisfying products to the guest Internal marketing is a process that involves the following steps: Establishment of a service culture Development of a marketing approach to human resource management Dissemination of marketing information to employees

Establishment of a Service Culture Service Marketing Program Service Culture Organizational Culture An internal marketing program flows out of a service culture A service marketing program is doomed to failure if its organizational culture does not support serving the customer An internal marketing program requires a strong commitment from management Service culture A culture that supports customer service through policies, procedures, reward systems, and actions Organizational culture The pattern of shared values and beliefs that gives members of an organization meaning, providing them with the rules for behavior in the organization

New Organizational Structure Customers Line Employees Supervisors Department Heads General Managers Corporate The conventional organizational structure is a triangular structure For example, in a hotel the CEO (chief executive officer) and COO (chief operating officer) are at the peak of the triangle The general manager is on the next level, followed by department heads, supervisors, line employees, and the customers The problem with this type of organization is that everyone is concerned with satisfying people above them in the organization, and very little attention is paid to the customer When a company has a service culture, the organizational chart is turned upside down The customers are now at the top of the organization, and corporate management is at the bottom of the structure In this type of organization, everyone is working to serve the customer Focus of Organizational Team

Nonroutine Transactions Strong culture prepares employees to handle nonroutine transactions Service culture provides employees with the proper: Attitude Knowledge Communication Skills Authority Nonroutine transactions are unique The ability to handle nonroutine transactions separates excellent hospitality companies from mediocre ones

Marketing Approach to HR Create Jobs that Attract Good People Improve the Hiring Process Promote Teamwork Emphasize the Importance of Initial Training Train Continuously Creating Jobs That Attract Good People Managers must use the principles of marketing to attract and retain employees They must research and develop an understanding of their employees’ needs, just as they examine the needs of customers The Hiring Process Service organizations need to hire for attitude and train for skills Finding employees who are good at creating a service experience is a vital goal and major hiring criterion of service organizations Careful selection can also have a positive effect on the employees that are hired because they feel special Teamwork If a company hires the right people, they will be team players In companies that practice internal marketing, if one employee makes an error, other employees try to cover it before the guest notices Organizations that lack teamwork create an uncomfortable environment for the guest The Importance of Initial Training If we hire right employees and provide good training, we will be well on the way to having enthusiastic employees create repeat guests Continuous Training Two principal characteristics have been identified in companies that lead their industries in customer service They emphasize cross-training They insist that everybody share certain training experiences Companies must make sure that their employees are familiar with all the products the organization sells Properly trained employees can deliver quality service, which helps the image of the firm, attracting more guests and employees to the organization Managing Emotional Labor Just as we try to understand the needs of our customers, we need to understand the needs of our employees Emotional labor is the necessary involvement of the service provider’s emotions in the delivery of the service Implementation of a Reward and Recognition System To sustain a service culture, human resource policies must create a system that rewards and recognizes employees and managers that provide good customer service Manage Emotional Labor Implement a Reward and Recognition System

Key Terms Cast members A term used for employees. It implies that employees are part of a team that is performing for their guests. Cross-training Training employees to do two or more jobs within the organization. Emotional labor The necessary involvement of the service provider’s emotions in the delivery of the service. Empowerment When a firm empowers employees, it moves the authority and responsibility to make decisions to the line employees from the supervisor. Internal marketing Marketing by a service firm to train effectively and motivate its customer-contact employees and all the supporting service people to work as a team to provide customer satisfaction. Moment of truth Occurs when an employee and a customer have contact. Organizational culture The pattern of shared values and beliefs that gives members of an organization meaning and provides them with the rules for behavior in that organization. Service culture A system of values and beliefs in an organization that reinforces the idea that providing the customer with quality service is the principal concern of the business.