14-07-2012, 05:00 PM
Role of Internal Marketing in Job Satisfaction of Employees in State Bank of India
Role of Internal Marketing in Job Satisfaction.pdf (Size: 146.49 KB / Downloads: 83)
Introduction
Services have increasingly assumed a more important role in the economic growth and development of countries
worldwide. The deregulation of services in many nations during the 1980s, especially in the areas of banking,
insurance, telecommunication, transport and healthcare has led to a stiff and intensified competition among
various businesses. Increased competition, expectations and changing technological and business propositions
made many service organisations to think of a marketing approach to deliver satisfaction to the customers.
Therefore, operating in such a changing environment requires the right type of personnel to survive. It is at this
point that the concept of internal marketing and internal customer satisfaction arises.
The concept of internal marketing had its origins in conventional marketing, where it has long been
recognized that high levels of customer service depend heavily on the personnel who interact with customers.
The concept underlines that “employees as customer” of which employees’ needs have to be fulfilled by the
business so that it benefits the business by way of improved working morale and commitment while reducing
the turnover rate. The employees are in many senses an important part of the service and they represent the fifth
'P' in the services marketing mix. In recent years there has been a shift in emphasis in the study of service
provision, from the external customer of the organisation towards the internal customer (i.e. employee).
Banking Industry
The global banking scenario is currently undergoing radical transformation owing to the liberalization,
privatization and globalization measures introduced by economies of world. The Indian banking industry is not
an exception. Banks play a very important role in the economic development of every modern state.
Traditionally, banking had been restricted from private participation in India and public sector banks had been
enjoying complete protection. This scenario has changed since 1991. The decade of 1990s witnessed a vast
change in the working of banking sector. The entry of technology has made a tremendous impact and
revolutionized the working style of many public sector commercial banks of India by introducing ‘anywhere
banking’ and ‘anytime banking’ to meet the growing customer needs.
The banking industry, like many other financial service industries, is facing unprecedented set of challenges
such as a rapidly changing market, new technologies, economic uncertainties, fierce competition, and
demanding customers. Banking is a service industry, therefore, the customer focus and customer service is the
differentiating factors. Frontline employees must have Customer orientation to satisfy their customers.
Review of Literature
The concept of internal marketing evolved from the idea that employees constitute an internal market within the
organization, which needs to be informed, educated, trained, rewarded and motivated to meet external
customers’ needs and expectations (Varey & Lewis, 2000). Woodruffe (1995) defined internal marketing as
treating both employees and customers with equal importance through proactive programmes in order to achieve
the objectives of the organization. Internal marketing is the application of marketing inside an organization to
enhance customer focused and customer oriented employees. It also takes into consideration the human
Ninth AIMS International Conference on Management January 1-4, 2012
resources perspective so as to instill a more motivated customer contact employee because finally it is the
customer contact /front-line employees of the service organization who interacts with the majority of customers
and generally handle a wide range of customer transactions.
According to Berry (1981) the concept of internal marketing is viewed “employees as customers’’, just like
external customers, internal customers need to have their needs satisfied. In line with this, Gronroos (1985)
urged that the scope of internal marketing must also consist of a work environment that motivates employees to
respond to management’s demand. He further opined that the internal product consists of a job and a work
environment, which motivates the employees to respond favourably to management’s demand for customerorientation.
Research reveals that the concept and the action of an enterprise’s internal marketing upgrade
employee job satisfaction (Tansuhaj et.al., (1991); Rafiq &Ahmed (2000) Conduit and Mavondo (2001)) and
this in turn improve the organizational performance of the enterprise (Pfeffer and Veiga (1999) Nebeker et.al.
(2001)). Therefore, it is suggested that for obtaining external customer satisfaction service firms should first
concentrate on their internal customer (employee) satisfaction George (1977).
Preston and Steel (2002) addressed issues related to internal marketing. They opined that recruting, training,
developing and motivating staff is the important components of internal marketing and felt that it is the external
marketing impact of each member of the staff that is the central focus of an internal marketing strategy. Naude
et al. (2003) developed three latent variables that included person, situation, and person x situation and found
that location, age, length of tenure, as well as numerous interaction variables.
Che Ha, Abu Bakar & Jaffar (2007) viewed internal marketing as an important concept where firms apply
marketing tools to attract and retain the best employees which enhance the business performance. They
identified 12 constructs of internal marketing inter-functional coordination and integration, customer orientation,
marketing like approach, job satisfaction, empowerment, employee motivation, quality of service, employee
development, and vision of the organization, strategic reward, internal communication and senior leadership.
Masroor and Fakir (2009) investigated the level of job satisfaction and intent to leave among Malaysian
nurses. They suggested that the nursing staffs were moderately satisfied with supervisor, job variety, closure,
compensation, co-workers and HRM/management polices and therefore exhibits a perceived lower level of their
intention to leave the hospital and the job. Nittala and Kameswari (2009) opined that service organizations need
to attract and retain customers to ensure a sustainable competitive advantage as the employee plays a central role
in attracting, building and maintaining relationships with customers. An empirical study conducted on the
impact of internal marketing factors on job motivation and job satisfaction in the retail stores revealed that the
working conditions and hours, hygiene &sanitation, rest rooms, support from superior, and attitude of
colleagues have highest influence on job satisfaction and motivation. Job satisfaction is of vital importance for
the growth of any organization. The satisfied employees are the biggest asset to an organization whereas the
biggest liability is dissatisfied employees.