1. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 1 Chapter 10: Internal Marketing

2. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 2 Internal Marketing The Internal Marketing concept states; that the internal market of employees is the best motivated for service-mindedness; and customer-oriented performance by an active, marketing-like approach; where a variety of activities are used internally in an active, marketing-like and coordinated way. Source: Christian Gronroos

3. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 3 Importance of Internal Marketing Employees must have a customer service attitude Employees must understand your product Employees must be enthused about your product and your company There must be good communication between employees and management Employees must be able to identify and solve customer problems

4. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 4 Objectives 1. To ensure that employees are motivated for customer-oriented and service-minded performance. 2. To retain good employees. 3. To increase customer satisfaction 4. To increase profitability

5. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 5 Internal Marketing Process 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

6. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 6 Establish a service culture Culture Shared philosophies, ideologies, values, beliefs, expectations, and norms Culture Shared philosophies, ideologies, values, beliefs, expectations, and norms

7. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 7 Establish a service culture (cont’) Developing a Customer Oriented Organization 1. Business mission-- managers supervisors and other -- to accept it. 2. Develop service-oriented management and leadership-- Service Culture-- –Management encourages service- mindedness and customer orientation of the employees

8. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 8

9. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 9 Development of a Marketing Approach to Human Resources Management Human systems need some glue, some central theme or themes around which behavior can coalesce. - Katz and Kahn Human systems need some glue, some central theme or themes around which behavior can coalesce. - Katz and Kahn Developing a service culture usually means a change in management behavior and reward systems. Developing a service culture usually means a change in management behavior and reward systems.

10. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 10 The Relationship Between the Marketing Function and the Marketing Department Source: Gronroos, “Designing a Long Range Marketing Strategy for Services,“ Long Range Planning (April 1980), P. 40.

11. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 11 Development of a Marketing Approach to Human Resources Management (cont’) Creating jobs that attract good employees A hiring process Teamwork The importance of initial training Continuous training Employee involvement in uniform selection Managing emotional labor

12. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 12 Dissemination of Marketing Information to Employees Information helps employees to solve guest problems. Employees should hear about promotions, new products, upcoming event, and ad campaigns from management. Hospitality organizations can communicate with their employees by employee newsletter, in-house newsletter, personal communication, and technology.

13. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 13 Implementation of a Reward Recognition System Employees must know how they are doing to perform effectively. The results of any service measurement should communicate with employees Most reward systems based on meeting cost objectives and achieving sales objectives. A few companies give rewards based on customer satisfaction.

14. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 14 Non-routine transactions Non-routine transactions: outstanding service opportunities. Empowerment

15. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 15 3. Use marketing techniques to target employees and develop an attractive packages for those employees. –Market Research –"Deep Sensing" –Market Segmentation –Product, Price, Promotion-- Distribution –Market Segmentation

16. Marketing for Hospitality and Tourism, 3e©2003 Pearson Education, Inc. Philip Kotler, John Bowen, James MakensUpper Saddle River, NJ 07458 16 4. Hire customer oriented employees 5. Train employees –Develop a pride in the organization and its products –Teach all employees service-oriented communications and interaction skills. 6. Market to employees before marketing to consumers