Expanded Study On Internal Marketing Theory

The internal marketing concept was initially proposed as a way of achieving consistent service quality — an important factor for promoting customer satisfaction in service area. Because service product has special nature such as "inseparability" and "variability", a factor of service quality such as "person" is particularly important. So, some scholars emphasize: "To have satisfied customers, the firm must also have satisfied employees". For getting employee motivation, scholars propose a thought of "treating employees as internal customers, and viewing jobs as internal product", this is an origin of the internal marketing theory.To develop the internal marketing theory further, the scholars have tried to apply "marketing-like technology" in enterprise management. At the same time, they still realize that, as a tool of the relationship management inside firm, internal marketing can promote the management innovation of enterprises and also improve efficiency of the strategy implementation.In recent years, service economy's share increase constantly in world economy, and management innovation became more and more active. Meanwhile, the implementation of firms is also increasingly important. More and more marketing scholars pay attention to the internal marketing theory with the above function. But even so, there still exists a great deal of questions in this theory.First of all, there is no unified definition of internal marketing up to now. The theoretical system is not completed, and the boundary of theory is comparatively fuzzy too. This situation has remained a larger developing space for the research of internal marketing, on the other hand, it become a little bit urgent. Secondly, the content of internal marketing is too narrow, and the study is not deep enough. Most scholars regard internal marketing as applying marketing technique in some inside management activity of enterprises, and do not analyze deeply on the suitability of those technique inside the management of firms. More important thing is that although most scholars think that internal marketing can promote the management innovation of enterprises and also improve efficiency of the strategy implementation, the valuable research about this question is still rare.This dissertation aims at looking for some solution to above problems. We have reviewed most of all the documents about internal marketing, and integrate the current internal marketing theory. Based on these, we realize that the difference between internal marketing and external marketing exist mainly in the difference of targets of marketing. Namely, if the outside person is regard as target customer in external marketing, the internal marketing treats the inside employee as the target customer. So we think all marketing activities, where the inside employee will be regarded as target client, belong to internal marketing category.Because marketing is a wide theory system, it is not merely some techniques or methods, but also a kind of philosophy and of social process. We think all contents of marketing should be reflected in the theory of internal marketing. Therefore, we attempt to construct a theoretical framework of internal marketing, involved in marketing philosophy, marketing function and macro-marketing. Under thisframework, a broadly-defined internal marketing involves the content of three aspects:Aspect 1: The internal marketing associated with marketing philosophy includes all activities involved in propagating the market orientation and developing market orientation organization;Aspect 2: The internal marketing associated with marketing function includes two aspects: using marketing method in inside enterprise management and managing relationship among the different functional departmentAspect 3: The internal marketing associated with macro-marketing thoughts is to solve the contradiction between internal producer and internal customer with the help of the principle of macro-marketing.Because the theory framework of internal marketing is too huge, and the literature associated with macro-marketing thoughts is extremely scarce, we will emphasize mainly on two aspects, namely, internal marketing associated with marketing philosophy and associated with the marketing function. So, the main content of this dissertation is based on above mentioned framework and the dissertation is organized according to above mentioned three aspects.The first aspect is concerned with introduction and theoretical foundation parts. Id Chapter 1, we give a review of the current theory of internal marketing, and expound the value of developing internal marketing theory. Based on them, we construct a theoretical framework of internal marketing, involved in marketing philosophy, marketing function and macro-marketing. In Chapter 2, we review briefly some knowledge on service marketing, experience marketing and the transaction cost theory, where these theories will be regarded as key theoretical tools in the dissertation.Concerning with Aspect 2 we discuss the internal marketing associated with marketing philosophy. As management philosophy, marketing advocates the idea of market orientation, so propagating market orientation in firm means constructing a market orientation organization. When many scholars (ex. Grdnroos 1981, Cowell 1984, Christopher et al. 1991) carry on research to internal marketing, they advocate that the task of internal marketing is to train employees' conception of market orientation and internal marketing includes activities to develop an organization with customer orientation. Hence, we classify all activities for developing an organization with market orientation to the framework of internal marketing and call it internal marketing associated with marketing philosophy. We consider the topic of "develop market orientation organization" in Chapter 3 and Chapter 4. In Chapter 3, we analyze three topics including the concept of market orientation, the influence of market orientation for enterprise performance and the influence factor for developing market orientation organization, respectively. We offer an important guidance for developing market orientation organization.In Chapter 4, we first study the measurement of market orientation, and then analyze the relationship among internal market orientation, external market orientation and enterprise performance by a measurement that we construct speciallyfor Chinese firms. The result of this positive analysis shows that external market orientation is remarkable positive correlation with enterprise performance, and the correlation between internal market orientation and firms' performance is not obvious, but internal market orientation can make for developing external market orientation.We investigate Aspect 3 in Chapter 5-9. We consider internalization of marketing from an operational view in this part and it involves two respects, namely, applying marketing technique in internal management of firms and managing the relationship among marketing function and others departments.For these two respects, we study application of marketing technique in human resource management in Chapter 5. Although this idea is discussed a lot in internal marketing literature, the suitability of marketing technique in HRM is ignored. We first introduce the change of marketing technology with the economy environmental progress, and then consider the application of different marketing technology in HRM. Finally, we discuss the suitability of marketing technique in HRM by the transaction cost analysis theory.In Chapter 6, we develop internal marketing tool that can promote strategy implementation. Many internal marketing scholars attempt to complete this idea but not succeed yet. We first admit and emphasize the importance of strategy implementation in business success, and then, we develop an internal marketing mix including 6Ps aiming at promoting strategy implementation by regarding the new strategy of enterprises as a kind of product which the administrator wants to sell to strategic executorOn relationship management among marketing and other functional departments, we discuss how to integrate marketing and human resources, marketing and financial affairs, marketing and R&D, respectively. On the other hand, we define integration as an effort to realize cooperation among sub-systems. We realize that the cooperation includes not only constant communication but also agreement of decision, so the key of integration is identification and management of interface among, different departments.Based on above reasons, in Chapter 7, we analyze the interface between marketing and human resource department, that is, how to manage the contact employee; In Chapter 8, we analyze the interface between marketing and finance department, involved in how to cooperate in current assets management, long-term assets management, financing decision and marketing investment; In Chapter 9, we analyze the interface between marketing and R&D department, namely, how to cooperate in new product development between the two departments. At the same time, we identify potential obstacle in cooperation course and construct a route map model promoting marketing to cooperate with R&D department.In the last section, we summarize some of innovation and shortcoming of our research, and show the direction of study in future.