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 The concept of internal marketing emerged in the 1980s in recognition of the importance of internal stakeholders as a group who should receive marketing attention.  The concept developed a greater impetus in the 1990s and is becoming a major focus of attention for academics and practitioners alike today.  The term ‘internal marketing’ is accredited to Berry (1980)

 Employees constitute an internal market in which paid labour is exchanged for designated outputs – the popular view  Employees are a discreet group of customers with whom management interacts, in order that relational exchanges can be maintained/developed with external stakeholders – an extended view (Piercy and Morgan, 1991)  Changing role of employee: -  Brand ambassador  Key interface especially in service organisations – where their actions can have a powerful effect in creating images amongst customers

Managers see the main components of internal marketing being within 3 main areas:-  Development, reward and vision....for employees  All three components have communication as a common linkage  Communication with employees and management is undertaken for various reasons: -  DRIP factors: differentiate; reinforce; inform; persuade  Transactional efficiencies: to co-ordinate actions; to promote efficient use of resources; to direct developments  Affiliation needs: to provide identification; to motivate personnel; to promote and co-ordinate activities with non- members

 This is about what individual members think and feel about the organisation to which they belong  When their view of org. characteristics matches with their own self-concept then org identity will be strong  Org identity also refers to the degree to which feelings and thoughts about the distinctive characteristics are shared among the members.....thus there are individual and collective aspects to org identity  Brand ambassadors: -  Identify closely; speak openly and positively

 Can have positive and negative effect on employees  Can clarify roles, make realistic promises and demonstrate that the org values its employees .....resulting in improved morale and commitment  Negative effects happen when advertising promises are unrealistic and cannot be delivered; messages are not true; roles portrayed are not flattering ....resulting in low morale, distrust and unfavourable attitude that can be seen by non- members

 Strategic capability  Past performance  Corporate communications  Credibility of CEO

 7 key factors that influence success or failure of internal marketing (Mahnert and Torres, 2007)  Organisation  Information  Management  Communication  Strategy  Staff  Education

 Organisational identity comes from organisational culture  Internal marketing shaped by culture as it provides the context within internal marketing practices take place  Org culture emerges from both tangible and intangible factors: -  Tangible: type of business; customers and other stakeholders; geographical position; size, age and facilities  Intangible: assumptions, values and beliefs held and shared

10 Culture Shared philosophies, ideologies, values, beliefs, expectations, and norms Culture Shared philosophies, ideologies, values, beliefs, expectations, and norms

 Establish a service culture  Development of a marketing approach to human resource management  Dissemination of marketing information to employees  Implementation of a reward and recognition program 11

Marketing for Hospitality and Tourism, 3e ©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James Makens Upper Saddle River, NJ

13 Human systems need some glue, some central theme or themes around which behaviour can coalesce. - Katz and Kahn Human systems need some glue, some central theme or themes around which behaviour can coalesce. - Katz and Kahn Developing a service culture usually means a change in management behaviour and reward systems. Developing a service culture usually means a change in management behaviour and reward systems.

 Creating jobs that attract good employees  A hiring process  Teamwork  The importance of initial training  Continuous training  Employee involvement in organisational choices eg uniform selection  Managing emotional labour

 Information helps employees to solve guest problems.  Employees should hear about promotions, new products, upcoming event and ad campaigns from management.  Organisations can communicate with their employees by employee newsletter, in- house newsletter, personal communication and technology.

 Employees must know how they are doing to perform effectively.  Most reward systems based on meeting cost objectives and achieving sales objectives. A few companies give rewards based on customer satisfaction.

Non-routine transactions: outstanding service opportunities. Empowerment

 Berry, L.L.(1980), Services marketing is different, Business, May/June, 24-9  Piercy, N and Morgan, R. (1991), Internal marketing: the missing half of the marketing programme, Long Range Planning, 24(April)  Dutton, J.E., Dukerich, J.M. And Harquail, C.V. (1994), Organisational images and member identification, Administrative Science Quarterly, 39,  Mahnert, K.F. and Torres, A.M. (2007), The brand inside: the factors of failure and success in internal branding, Irish Marketing Review,19(1/2), 54-63