Table of Contents

Abstract:-............................................................................................................................1

Introduction........................................................................................................................2

Objective of research:-.....................................................................................................3

Research Question:..........................................................................................................4

Research Design Detail:..................................................................................................4

Literature Review..............................................................................................................4

Theoretical frame work:-.................................................................................................8

PROBLEM STATEMENT:...........................................................................................10

Hypothesis of Study:-....................................................................................................10

Methodology for Research:-...........................................................................................10

Data collection Methods:...............................................................................................10

Population & Sample:....................................................................................................11

Data collection:..............................................................................................................12

Data Analysis:................................................................................................................12

Result and interpretation detail:-...................................................................................13

Regression Table...........................................................................................................13

Hypothesis analysis:-.....................................................................................................14

Conclusion:.......................................................................................................................16

Recommendation:............................................................................................................16

Acknowledgement:...........................................................................................................17

Appendix...........................................................................................................................19

Abstract:-

Internal marketing’s main focuses is to acquire and retain customer-oriented employees.

A development-oriented economy requires organizations to attract and retain customers

to ensure a sustainable competitive advantage. To achieve this aim, organizations must

focus their efforts on developing and sustaining an organizational culture that emphasizes

internal customer well-being as a means to attract and retain external customer. This

paper explores the relationship between internal marketing and external marketing. We

propose that in order for firms to undertake successful marketing activities in dynamic

business environments, employees must be willing to offer the required effort to adapt

rapidly and fluently to external environmental change. Based on the literature in internal

marketing and external marketing, we propose a model that relates five key internal

marketing practices to external marketing that build customer satisfaction and loyalty.

Key words: internal marketing practices, external marketing, customer satisfaction.

IntroductionMarketing is the business function which identifies customer needs and wants,

determines which target market the organization can serve the best and designs

appropriate products, services and programs to serve these markets. So we can say that it

is a philosophy that guides the entire organization. The goal of marketing is to create

customer satisfaction by profitably. The marketing department can not accomplish this

goal by itself, it must co-operate closely with other departments in company and partners

with other organizations throughout its entire value delivery system to provide superior

value to the customer. Organization gain market leadership by understanding customers

through superior value. Marketing is not something to satisfy customer but also

employees. Before going to explain the affect of internal marketing on external

marketing first we would like to define these two terms. Internal marketing is a process

which trains, motivates and empowers employees at all management levels to

consistently deliver a satisfying customer experience. External marketing is the forces

outside of an organization that control a market. So we can say that internal marketing is

within the organization and external marketing is outside the organization. Internal

marketing focuses on employee’s motivation to provide superior value to the customers.

If customer is satisfied with the company’s product, it means that company’s marketing is

good for making profitable relationship. If company is weak in internal marketing. It

cannot achieve its major objectives that are profit maximization through sales marketing.

The main aim of this study is to investigate which internal marketing practice effect

external marketing. The research subjects consist of employees in banks at Blue Area

Islamabad of management level.

Object ive o f research : -

The core objectives of this study are given as follows;

First objective of this study to get insight that "how internal marketing of any organization

influence on externalities of that organization".

Second to know how the employee job satisfaction effects on external marketing.

Organizational commitment helps to improve externalities of an organization.

Mostly external market is affected by organization's loyalty.

Most of the external factors affect the trust on management issues.

Research Quest ion :

We want to describe “Which internal marketing factor effect strongly external

marketing”?

People influenced and discarded any organization; we explore the underlying causes of

these problems caused.

Research Des ign Deta i l :

In this research we use cause and effect study so regression analysis supports this

study as research design. We calculate multiple regression coefficient to analysis our

research in order to quantify the result for the purpose to estimate the assumptions.

Multiple regressions allow examining the effect of factors effecting on outcomes. In this

study, in order to test the mentioned hypothesis, all of the internal marketing factors

selected in this research like job satisfaction, organizational commitment, organizational

loyalty, trust on management and internal communication have been summed up and then

multiple regressions has been run with these as independent variables and external

marketing as dependent variable.

Literature Review This research is all about the marketing strategy of a company. This strategy is divided

into two parts internal marketing and external marketing. Internal marketing is attracting,

developing, motivating and retaining qualified employees through jobs that satisfy their

needs. The satisfaction of employees strongly influences by the quality of services

extended to external marketing that satisfy to customers. Both have direct impact on

company’s success. Those companies who run their programs more efficiently by

providing different benefits to their employees are successful in external marketing.

According to Berry (1981) Employees are internal customers in internal marketing are

just like external customers. Internal customers would like to have their needs satisfied.

The reason is that by satisfying the needs of internal customers, an organization will be in

a better position to deliver the quality desired to satisfy external customers. By fulfilling

the employee needs enhances employee motivation and retention and also employee

satisfaction, the higher the employee satisfaction generates external satisfaction and

loyalty. So we can say that internal marketing enhance employee motivation, creativity,

innovation and performance. Internal marketing is often connected with customers and

sales people as a goal to get as loyal customers. According to Cowell that Internal

marketing is a management approach which enables and motivates all members of the

organization to understand their role and to satisfy their customers by providing them

high quality services

The basic way to achieve employee satisfaction is treating employees as customers. The

company should recruit those employee who are highly motivated, customer oriented and

sales minded. Employees also need the right type and the level of training to perform

their jobs. This can help to reduce uncertainty surrounding their role and help employees

to meet the needs of customers more effectively.

According to Bansal et all (2001) that internal marketing can improve the organizational

commitment and job satisfaction when employee job satisfaction is enhanced, employees

adopt a positive attitude when serving external customers, a situation that can help to

enhance customer loyalty.

So we can say that firms can use internal marketing activities to transmit organizational

vision and goals to employees. Through the design and implementation of human

resource management systems for internal marketing, internal marketing is available to

enhance employees' job satisfaction, motivate employees to achieve organizational goals

and promote employee perceptions regarding organizational commitment.

Internal marketing is based on the considering that no single organization function is

effective if it operate in individually. Multi operations and people with different skills

have performed activities in creating and delivering products and services. These cross-

functional activities and the people who perform them have major influence upon the

outcomes. In today’s world, managers must ensure that all the workers are actively

involved in the delivering high quality products.

According to Barnes, (1989) that the loyalty of customer is based on the service

satisfaction, however it requires the collaboration and commitment of employees.

Employees commitment to the organization and their effort towards the achieving

organizational goals or in other words we can say that employees loyalty build customer

loyalty. Employee commitment affects the external marketing factors. Encouraging the

employees to buy their own services and products, this can increase the sales and

confidence for external customer.The key aims of internal marketing are the development

of internal and external customer awareness and the removal of functional barriers to

achieving organizational effectiveness. Employee motivation is also very important, and

it can be done by giving incentives or rewards to them

According to Heskett, Jones, Loveman, Sasser, and Schlesinger (1994, pp. 164–165),

Profit and growth are primarily achievable by customer loyalty. Loyalty has a direct

relationship with customer satisfaction. It is largely influenced by the value of services

provided to the customers. Satisfied, loyal and productive employees create value.

Employee satisfaction, in turn, results primarily from high-quality HR practices that

enable employees to deliver results to the customers. It is clear that the success of

external marketing of a service organization is dependent on the success of how well it

markets itself internally.

According to Barnes & Morris, (2000), Morrison, (1996). Internal marketing practices

mean to retain the most qualified and skilled workers, because these are the assets of any

organization. If the employees are satisfied they can better take care of the external

customers and high quality customer satisfaction is derived by internal employee’s

loyalty. If the internal structure of any organization is strong, it will defend the external

factors.

A successful internal marketing process produces highly motivated and well-trained

customer-support employees, who always do the right things first in the right way, and

perform the right behavior when treating their customers. Employees with flexible nature

are the need of today’s competitive environment. Marketers have to concentrate on the

internal market as much as on the external market, if they want marketing plans and

strategies to be successfully and effectively implement within their organization.

Therefore, it is very important to build the right and appropriate internal environment to

build strong customer relationship. If the internal structure of the organization is standing

on strong bases, like employee satisfaction that organization can satisfy their external

customers easily.

After studying the articles, we seem that for the success of external marketing, internal

marketing is very important. In internal marketing we found five independent variables

like job satisfaction, organizational commitment, trust on management, organizational

loyally and internal communication. Now we will see how these variables impact on

external marketing.

Theoret i ca l f rame work : -

Dependent Variable:

External marketing is the dependent variable.

External Marketing:

It represents the whole externalities of an organization like expectation for job or carrier

or for services provided by the organization when people come to an organization in

order to use its provided services and get satisfied. External marketing plays an important

role in the success or failures of an organization. If a customer is satisfied from the

organizational services then behaviors would be positive towards the organization.

In dependent variables:

Following are the key factors of internal marketing used in this research study

Job Satisfaction:

We use the following question for job satisfaction. 5 -I always look ahead to go to work .6 -I enjoy doing my work .7 -I have natural inclination to my job . -Overall I am satisfied with my job. 8

Organizational commitment:

We use the following question for Organizational commitment.

9 -Our organization is sincere with employees .10 -This organization has a great deal of personal meaning for me .

11 -I would be happy to spend the rest of my carrier in this organization .12 -For solving problem your organization likes to have discussions.

Trust on Management:

We use the following question for Trust on Management.

13 -I trust on my organization’s management .14 -Management generally solves my personal problem .

15 -Management is friendly with the employee .16- In case of problem, I feel free to contact with management.

Organizational loyalty:

We use the following question for Organizational loyalty.

17 -This organization deserves my loyalty .18 -I feel strong belonging to this organization .19 -I believe in the value of remaining loyal to this organization. 20 -The recognition given for effort/good work .

Internal communication:-

We use the following question for internal communication.

21 -Our organizational goals are clear to all employees . 22 -Our organization offers employees a vision that they can believe in .

23 -Our organization communicates to employees to improve their service roles.24- Our organization emphasize on effective communication with employees.

PROBLEM STATEMENT:

“Impact of Internal Marketing on External Marketing.”

Employees and customers are the main focus of this research study; we explore the

causes and its effect when they go for an organization for job or as a customer. The

external marketing is productive when it is in the favor of customers.

Hypothes is o f S tudy: -

In order to investigate the effects of internal marketing factor on external marketing and

importance of these factors. The following research questions have been proposed:

Which internal marketing factor effect strongly external marketing? Also the set of

related hypothesis have been formulated to link the factor of internal marketing to

external marketing as follows:

Ho: External marketing effected through internal marketing

HI: Job satisfaction has positive impacts on external marketing.

H2: Organizational commitment has positive impacts on external marketing.

H3: Trust on management has positive impacts on external marketing.

H4: Organizational loyalty has positive impacts on external marketing.

H5: Internal communication has positive impacts on external communication.

.

Methodology for Research:-This research study is cause and affects study so; we used regression analysis

which is a statistical tool through which we learn about which factor influence strongly

on external marketing.

Data co l lec t ion Methods :

The data used for this study were obtained from basically these sources.

Observation

Secondary data

Primary data

Analysis

Conclusion

statiscal tool can be found the most suitable mean for the research of this study, which

can lead us a better understanding for the research problem. To understand the main idea,

it can be very helpful to use the statistical analysis to see the impact of independent

variable on dependent variable.

Populat ion & Sample :

For getting the data for research we select the banking sector because banking sector

provide a lot of benefits and facilities to their employees just to ensure their customer

satisfaction. There are several reasons for selecting this sector. One of reason is to

choosing these groups is that banking people have some knowledge about internal and

external marketing and also convenient to collect and analyze the data.

Sample is 100 people of management level employees in banks of five different age

groups. They are divided among different target groups to find out the attitude towards

external marketing.

We categorized the people into five age groups:

Under 25

26-35

36-45

45-55

56 and Above

Data co l lec t ion :

We design the questionnaires for the purpose of data collection. It is important for this

research to use multiple sources of data to get the most possible wide view about this

research.

We also use the secondary data because it is relatively cheap and quick to obtain, and

also reliable and accurate. We collect the articles and gain the information through

internet. We apply the statistical tools such as means, regression. We find the results

through statistical tools.

The major data for the work were collected by means of structured questionnaires.

One hundred copies of questionnaires were distributed in the banks of BLUE AREA

Islamabad

Data Ana lys is :

We use the secondary data because it is relatively cheap and quick to obtain, and also

reliable and accurate. We collect the articles and gain the information through internet.

We apply the statistical tools such as means, regression. We find the results trough

statistical tools.

Result and interpretation detail:-For results and their interpretation we use regression analysis in order to calculate

accurate results.

Regress ion Tab le .

Regression Statistics  

Multiple R 0.400838727

R Square 0.160671685

Adjusted R Square 0.116026562

Standard Error 0.723797359

Observations 100

Observation was 100

In above table our multiple regression is R = 0.40 or 40%

The value of regression coefficient is R2 = 0.16 or 16%

And adjusted R2= 0.116 or 11.6%

Stander error is SE= 0.724 or 72.4%

Hypothes is ana lys is : -

On the behalf of regression coefficient we accept or reject our alternative hypothesis

again null hypothesis.

Ho: External marketing effected through internal marketing

Our Ho is positive and grater then 1.Any hypothesis which are positive it is accepted and

strength of acceptance is shown with its value that how much it effected on Ho.

Now we check that which alternative hypothesis is accepted or rejected against null

hypothesis and its reason.

H1: Job satisfaction has positive impacts on external marketing.

H1 is accepted against Ho because it is positive and it is more then zero. Its present age

of effect is 33% which means that job satisfaction affects the external marketing with the

percentage of 33.so we accept h1 because it shows that job satisfaction has positive

effects on external marketing. The reason for this factor effect is that employees are

satisfied with their jobs. The reason may be work load, timing, culture or compensation

and punishment if something commit against rules and regulation of organization

H2: Organizational commitment has positive impacts on external marketing.

H2 is also is accepted against Ho because it is positive and it is more then zero. Its

present age of effect is 17% which means that Organizational commitment affects the

external marketing with the percentage of 16.so we accept H2 because it shows that

Organizational commitment has positive effects on external marketing but its effect is not

as stronger as job satisfaction. The reason for this factors weak effect is that employee are

not as much committed with their jobs they just do job in order to earn not do job as duty.

The reason may be environment of organization or discomfort while working

organization

  CoefficientsIntercept 2.062019399

X Variable 1 0.324776329

X Variable 2-

0.167702218X Variable 3 0.133301676X Variable 4 0.015770825X Variable 5 0.13889048

H3: Trust on management has positive impacts on external marketing.

H3 is also is accepted against Ho because it is positive and it is more then zero. Its

present age of effect is 13% which means that Trust on management effects the external

marketing with the percentage of 13.so we accept H3 because it shows that Trust on

management has positive effects on external marketing but its effect is not strong as

compare to job satisfaction. The reason for this factors weak effect is that employee has

not strong trust on their upper man agent. If in organization there is some problem or an

employee get in problem employee are not rushed to share with management for solving

the problem may be they are scare of file from job.

H4: Organizational loyalty has positive impacts on external marketing.

H4 is also is rejected against Ho because it is negative and it is less then zero. Its present

age of effect is 17% negatively which means that Organizational loyalty effects the

external marketing with the percentage of 17 but negatively. So we reject H4 because it

shows that Organizational loyalty has negative effects on external marketing but its effect

is strongly negative as compare to job satisfaction. The reason for this factors effect is

that employee are not loyal to organization. If they get a good job they leave the

organization. Reason behind this is mostly wrong person for wrong job and not awarded

satisfactory compensation against job.

H5: Internal communication has positive impacts on external communication.

H5 is also is accepted against Ho because it is positive and it is more then zero. its

present age of effect is 14% which means that Internal communication effects the

external marketing with the percentage of 14.so we accept H5 because it shows that

Internal communication has positive effects on external marketing but its effect is not

strong as compare to job satisfaction. The reason for these factors weak effect is might be

autocratic leadership style use in the organization.

Conclusion:Internal marketing in is acknowledged as an important activity in developing a marketing

oriented organization. Fundamentals aims of internal marketing are to develop internal

and external customer awareness and eliminate functional barriers to organizational

efficiency. While spending more time doing marketing internally will produce more

knowledgeable and dedicated employees who will, in turn, seek the goal of providing

excellent services to customers. This study also identifies a positive relationship between

internal marketing and external marketing.

This study did not cover the opinions of customers, only opinions of managers and

employees are covered about customers. Customers were neglected in this study. Another

draw back was that only five independent were analyzed for studied not all variables

were studied.

Recommendation: From the research we seem that external marketing is positively correlated with internal

marketing. So managers need to pay significantly more attention to the communication of

marketing and other organizational strategies and objectives to employees so that they

understand their role and importance in the implementation of the strategies and

achievement of marketing and organizational objectives. It ensures that employees are

highly motivated and customer oriented and also provides employees with the right type

and level of training to perform their jobs is very important. The organizations should

also pay attention on the quality of products because customer satisfaction is based on the

quality of products.

Acknowledgement:In the name of Allah, the most merciful and the most beneficent. First of all we are

grateful to our ALLAH almighty who awarded us blessings for such effort and also to our

holy Prophet Hazart Muhammad PBUH who introduced the light of knowledge in

darkness of ignorance. We also like to thank our parents who encouraged us and also to

our companions and friends who gave their suggestion where we were on the wrong way.

We extend our deepest gratitude and profound regards to Mr. Arif Vaseer and Mr. Saqib

who remain a source of inspiration for us through their guidance and teaching. Esteemed

appreciation and recognition to our friends, colleagues and family for their support and

encouragement throughout this endeavor

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Appendix External marketing

1 -Our customer is fully aware of given service .2 -Media is creating strong influence on buying behavior of our customers.

3- Marketing tools plays effective role for organizational goals .4 -This organization has achieved its objective through marketing .

Job Satisfaction :

5 -I always look ahead to go to work .6 -I enjoy doing my work .7 -I have natural inclination to my job . -Overall I am satisfied with my job. 8

Organizational commitment :

9 -Our organization is sincere with employees .10 -This organization has a great deal of personal meaning for me .

11 -I would be happy to spend the rest of my carrier in this organization .12 -For solving problem your organization likes to have discussions.

:-:Trust on Management

13 -I trust on my organization’s management .14 -Management generally solves my personal problem .

15 -Management is friendly with the employee .16- In case of problem, I feel free to contact with management.

Organizational Loyalty :

17 -This organization deserves my loyalty .18 -I feel strong belonging to this organization .19 -I believe in the value of remaining loyal to this organization. 20 -The recognition given for effort/good work .

Internal Communication

21 -Our organizational goals are clear to all employees . 22 -Our organization offers employees a vision that they can believe in .

23 -Our organization communicates to employees to improve their service roles.24 -Our organization emphasize on effective communication with employees .

19

References

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activities on external marketing outcomes”, Journal of Quality Management, 6, pp 61-76,

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Barnes, J.G. (1989), “The internal marketing programme: if the staff won’t buy it, why

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Barnes, B. R., & Morris, D. S. (2000). Revising quality awareness through internal

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Total Quality Management, 11, 473–483.

Berry, L.L. (1981), “The employee as customer”, Journal of Retail Banking, Vol. 3

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