Effectiveness of Internal Marketing in Hotels

Topics: BusinessManagement


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Last updated: April 18, 2019

The discussion of this essay is based on the perspective of internal marketing as the foundation for a successful marketing strategy, and the interrelation of external and interactive marketing to internal marketing rather then the singular dominance of one type of marketing over the others, hence proving that an intrinsic relationship between the three types needs to be established for customer satisfaction.However, now the importance of internal marketing is gradually being understood by both academics and industrial practitioners alike as stated by Kotler (1991, cited in Barnes et al, 2004) it is a prerequisite for successful external marketing, since the needs of the internal customers (employees) must be satisfied, inorder for both the employees and organisation to be in a better position to satisfy their external customers.Internal marketing is not solely based on a single management function for its effective operation, but on the fact that multiple operations and variously skilled people must be involved for the effective creation and delivery of the product or service. Management today must ensure that employees in every part of the organisation are involved in the delivery of quality through the customer-supplier chain (Ahmed et al, 2003).It must be understood that the concept of internal marketing is not a recent development but has been discussed in publications from the turn of the twentieth century in which people have tried to define methods and programmes to instil commitment in employees; this essentially proves that internal marketing is definitely not a post-industrial phenomenon (Lewis & Varey, 1998).Internal marketing with regard to employee relations was clearly practised by hoteliers like Statler (considered the father of modern hospitality), way back in the late 1800’s who provided his employees with vacation pay, health care, profit sharing and a six-day week, and in return his expected his employees to provide their guests with courteous and efficient service better then any other hotel in the world (King, 1995). Intense discussions about the use of marketing concept in internal operations really took off in the late 1970’s with transition from an industrial era to a more service and customer oriented era (Lewis & Varey, 1998).The implications of internal marketing and the external customer are many, as the front line employees in the service industry especially the hospitality industry carry out major marketing functions, so this fortifies the fact that every department of a service organisation must be involved in the customer-supplier chain to provide quality service to their external customers, because research supports the fact that customers’ evaluation of the service rendered is a dual perception influenced by elements, which are under the control of the organisation (for example, the servicesacpe of a restaurant), and those which depend on the interaction of the employee with the customer ( the behaviour of the employee), this interaction of the employee and customer being outside the control of the organisation is termed as the moment of truth, and this interaction is especially unique in hospitality as the employee is part of the product (Flipo, 1986;Kotler, 2006).

Figure 1 (cited in Flipo, 1986) demonstrates this concept explicitly. fig. 1 Management in order to ensure the deliverance of high quality service must develop procedures and techniques to evolve the internal marketing concept. Gronroos (cited in Kotler, 2006, p. 359) states that ‘… the internal marketing of employees is 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.

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So in other words internal marketing strategies are established around the traditional marketing mix (the 4 P’s), where the Product for the employee is the ‘job’, the Price, is the salary and renumerations agreed upon by the employee and management to perform the job, the Place is the geographical location and proximity of the service organisation to residential areas to attract the best people to the job, and lastly, the Promotion is the communication (the selling) of the corporate and marketing strategy chosen by the management to its employees (Flipo, 1986).So, the steps for an effective internal marketing process are: Establishment of a service culture, the organisational culture is the pattern of values and beliefs that provide meaning and rules for behaviour in the organisation. Management must develop a service culture that supports customer service through policies, procedures, reward systems and actions (Kotler, 2006). Goffee and Jones (1998, cited in Varoglu ; Eser, 2006) developed a system for understanding and comparing organisational cultures, based on Sociability (degree of friendliness) and Solidarity (degree to which people share a common understanding).They identified four basic types of cultures: Networked (high sociability, low solidarity) is a culture where everyone comes to know each other quickly, Mercenary (low sociability, high solidarity) is competitive culture, Fragmented (low sociability, low solidarity) is individualistic culture where people don’t identify with their organisation and communal (high sociability, high solidarity) is friendly culture, where communication flows easily across the various levels of the organisation, and employees strongly identify with their organisation. Since the hospitality industry differs from other with the intense relation between the service personnel and customer, this type of culture seems to be ideal for the hospitality industry, because rather then power, role or task, it is centred around the individual interaction, but inorder for this kind of culture to flourish managers should be less operations-oriented and instead motivate their employee to go beyond their job descriptions in terms of service rendered (Varoglu & Eser, 2006).In this type of culture the organisational chart is turned upside down, where the customer is the priority and corporate management at the bottom, so each level right from the corporate management to the line employees support and help each other to effectively serve the customer (Kotler, 2006).

Figure 2 illustrates the upside-down service culture (Kotler 2006, p. 363) The next step in the internal marketing process is Development of a marketing approach to Human Resource Management since the main focus of a hospitality organisation is its employees, so it must develop a human resource management program that facilitates the selection of people with the characteristics like Strong interpersonal skills, Behavioural flexibility and Empathy.For example Ritz-Carlton took four years to develop its ‘Targeted Selection Process’ for hiring new employees which was based on developing personality profiles for every position within the company. The interview process is also a gruelling procedure where the individual is interviewed by three levels of management and only one out every ten are chosen (Morrison, 2002). After the selection process, orientation and training is needed because though attitudes of the employees are innate certain skills to help interact with guests can be acquired, Disney has one of the most highly regarded orientation and training programs for new employee, they have to attend one day at the Disney University to learn Disney operations and guest-philosophies (Morrison, 2002).

The next hurdle is keeping the employees motivated and retaining their services, this done through regular communication about the organisation through newsletters, acknowledging and rewards the efforts of the staff through promotions like employee of the month, setting clear objectives and service standards for the employees, clearly laying out career advancement opportunities, creating an environment which promotes trust and understanding through open and honest communication between staff, supervisory and managerial levels and motivating employees to be service-oriented through accurate descriptions of the service expectations of the guest (Ahmed et al, 2003; Morrison, 2002). Through internal marketing employees understand the comprehensive logic and benefit of customer oriented service thereby leading to greater customer satisfaction (King & Grace, 2005).To further motivate and make their opinions matter service employees need to be empowered. Especially in the hospitality industry due to is simultaneous production and consumption nature, line employees need to be empowered to take quick decisions without the prior authorisation from their supervisors. This further results in customer satisfaction as the customer is not required to wait. The last step in the process is Dissemination of Marketing Information to Employees since the most effective way of communicating with the customer is through the line-employees, its essential for the corporate strategy to be clearly communicated to the employee so that the organisational vision is not disjointed.

It is also important that employees be made aware of their contribution to the company’s success, this can be achieved through company seminars, annual conferences, regular employee-manager meetings, and in the hospitality industry, employees should be allowed to experience the services provided, to have a better understanding of their product and be able to genuinely recommend them to the guests. There is also a need to emphasis on departmental and interdepartmental team-work inorder to establish a stimulating and cohesive environment. Improved communication enhances knowledge transfer especially if regularly events are to be organised facilitating regular interdepartmental interaction (Barnes et al, 2004; Kotler, 2006).From the above steps it is clear that the internal marketing process is aimed at customer satisfaction. fig. (Barnes ; Morris 2000, cited in Barnes et al, 2004) Figure-3 distinctly portrays the link between service quality, productivity and customer satisfaction (both internal and external customers), and in conclusion proves the fact that internal marketing concept rest on the assumption that employee and customer satisfaction are inextricably linked, so the higher the degree of internal customer (employee) satisfaction, the greater the chance of external customer satisfaction and further customer retention (Reichheld ; Sasser 1990, cited in Barnes et al, 2004), this establishes internal marketing as the foundation of successful interactive and external marketing.

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