A Research Proposal:

Internal Marketing: A source of competitive strategy for service sector business in Nepal

Chapter One

INTRODUCTION

1.1  Background

Business sector, especially the service sector is in the realm of rapid changes. The situation becomes more complicated if the service culture is still emerging not very mature. Business may face the situation to withdraw a unit or a whole business by virtue of those reasons. Especially in the Nepalese context, small market with huge potentiality but organization’s concentration in major cities and large number of companies in the same industry with poor healthiness has created the immense competition in each and every industry. At this situation the better organization will deliver than their competitor the best they will realize in their strength and opportunities over their competitors. It means there is a need to deliver quality goods and services. The solution for this is internal marketing. Because, with the resulting higher employee commitment internal marketing leads to market orientation. And that is the ultimate and best way to deliver the customers’ needs by improving the organizations performance as the market driven organization.

Internal marketing is used as the solution since 1970s’ by those organizations which implore in the market. This concept was first introduced by Berry et.al as the solution to provide quality services and products. Several researchers agree on the statement that internal marketing helps in maintaining workforce which is highly satisfied and motivated and this work force will help in accomplishing the performance target set by organization.

Internal marketing is a critical activity that helps a manager to identify the factors that influence the employees’ commitment and loyalty. Managers can use those factors to develop the job products that help them to attract, develop, motivate and retain employee. Internal marketing is considered as a prominent activity by service sectors managers’ to develop organizational competitiveness in ever changing market place.

1.2  Statement of the Problem

This study explicates the impact of different activities and job products of internal marketing on the implementation of organization’s activities to meet the performance target set by organization. The main thesis problem of can be outlined as follows:

 What effect does internal marketing have on organizational commitment?

1.3  Objective of the Study

The objectives of this thesis can be outlined as follows:

Specific Objective:

To explore, study and analyze critically the effect of internal marketing on organizational commitment.

General Objective:

To analyze the effect of various aspects of internal marketing on organizational commitment of employees.

To identify, if any possible ways to increase organizational commitment.

1.4  Research Hypothesis

This section represents the relationship between internal marketing practices and its impact on organizational commitment. Additionally the effect of internal marketing on market orientation and the age, job type and gender as a moderator will be tested.

H1: Internal marketing is positively related to organizational commitment.

H2: Job type, age and gender moderate the internal marketing and organizational commitment relationship.

Chapter Two

Literature Review and Theoretical Framework

2.1  Literature Review

It is argued that internal marketing programs and managerial influence strategies must be aligned, if internal marketing is to become an effective part of the practice of management. Similarly, internal marketing is also viewed as a critical issue faced by marketing professionals, HR managers, and executives in general, (Pitt, Bruwer, Nel & Berthon, 1999). Researchers such as, Ahmed & Rafiq (2003) define IM practice encompasses several activities that have been grouped in four major themes that appear to constitute IM: training and education, the image of the internal customer, quality standards and rewards systems. Furthermore, the basic purpose for applying internal marketing concept is to get motivated employees and to make them conscious at each and every level to serve customer in a better way (Gronross, 1990; Gronross, 1981). Researchers also view Internal marketing as a management approach in which frontline employees work as support staff area included; this approach enables and motivate employees of the firm to do their own evaluation and for adoption of customer oriented services (Cowell, 1984).

Organization commitment is defined as the commitment and/or loyalty of employees with the firm as if they feel obliged to stay with the bank and to work for it in the future as well (Cichy, Cha, & Kim 2009). Researchers have categorized this commitment into three dimensions: (i) affective commitment – emotional attachment to the firm, (ii) Normative commitment – socialization experience with other employees, and (iii) Continuance commitment – self-sacrificing when quitting a job (Meyer & Allen, 1991).

Hogg (1996) states that internal marketing could be an useful resolution for creating commitment in employee and success increase in failed and traditional internal relational plan. Schlessenger & Heskett (1991) emphasize on importance of high – motivation employee and refer it as success cycle. This cycle is result of awareness increase of employee about their role in increase of customer satisfaction.

Researchers have revealed that internal marketing help an organization to reduce undesirable cost and improve the performance of employee inside organization by improving organizational commitment. When employee feel that they are protected and nurtured by an organization it creates a sense of emotional bound with an organization. That ultimately helps to achieve the effectiveness in employees’ performance.

2.2  Theoretical Framework

The theoretical framework shows the hypothesis developed and based on the relevant literature presented in above section. The below figure present theoretical framework model of the predictor of organizational commitment and the moderating role of the employees’ age, job title and gender on internal marketing and organizational commitment relationship.

Chapter Three

Methodology

Methodology refers the steps that will be adopted in this study. The more systematic method gives the more actual results for the study. The method for this study includes research plan and design, description of sample, data collection procedure and data analysis plan.

3.1.Research Plan and Design

A research design is the planned specification of methods and procedures for acquiring the information needed to structure to solve the problems. All activities that must be undertaken one after another are presented below in table with duration for each activity.

The research design used in this study is descriptive. It includes survey and fact finding enquiries to fulfill different objectives. It will use the available data from primary and secondary sources. Structured and close ended questionnaire will be used to gather the information through primary sources. Both managerial and functional level employees’ of service providing organization will be used as the sample for this study.

3.2.Description of the Sample

Especially internal marketing is considered as a prominent activity in service related organization. Because of increasing competition and rapid changes that take place in service related business. Thus organizations that deliver services will be in primary focus while choosing sample. Employees (both managerial and functional level) are the single sampling segment of this study. The sample size of one hundred and forty respondent will be used by considering the budget and time constraints. The entire respondents to meet the determined sample size will be selected randomly in ten days of data collection.

3.3.Time Framework

This research will be completed in a forty days. The more period of study will be devoted for data analysis and report generation. As the sample size is not too large, the data collection and coding will be completed in total of thirteen days

3.4.Data Analysis Plan

The necessary data for this study will be collected from different service providing organization. Thus at first data about internal marketing and organizational commitment will be collected and analyzed using a statistical programs like SPSS. The T-test, Anova test etc. will be used to identify the level of internal marketing and its significance in organizational commitment. All the findings from these analyses will be analyzed thoroughly with consideration of their statistical meaning. The graphs, tables and other necessary form of data will be generated by using Excel, Microsoft word, Acrobat reader and SPSS programs.

Reference

·         Ahmed, P.K., & Rafiq, M. (2003). Commentary Internal marketing issues and challenges. European Journal of Marketing, 37(9).

·         Cichy, R.F., Cha, J.M., & Kim, S.H. (2009). The relationship between organizational commitment and contextual performance among private club leaders. International Journal of Hospitality Management, 28, 53-62.

·         Gronroos, C. (1990). Service Management and Marketing-Managing the Moments of Truth in Service Competition, Lexington Books, Lexington, MA.

·         Hogg, C. (1996). Selling your soul. Human Resources, 96 (25), 88-90.

·         Meyer, J.P., & Allen, N.J. (1991). A three-component conceptualization of organizational commitment. Human Resource Management Review, 1(1), 61-89.

·         Pitt, L., Caruana, A., & Berthon, P. R. (1996). Market orientation and business performance: some European evidence. International Marketing Review, 13(1).

·         Schlessenger, L.A., & Heskett, J.L. (1991). Breaking the cycle of failure in services. Sloan Management Review, 32 (3), 17-28.