PROJECT PROPOSAL 1

Running head: PROJECT PROPOSAL

Project Proposal: The Usefulness of Internal Marketing in Local Government Image Building

Gerald Seals

Newberry College

Submitted in partial fulfillment of the requirements for

BUA 472 – Organizational Behavior

February 6, 2013

Quarter and Year: Spring, 2012

Address: 2100 College Street

City, State, Zip: Newberry, SC 29108

Phone: 864-350-7070

E-mail: Gerald.seals@newberry.edu

Instructor: Prof. D. Mans Excellence

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Abstract

Presented is a proposal to examine the merits of internal marketing to improve the image and

service delivery performance of local government organizations. The logistical layout of the

proposal begins with an introductory discussion followed by definition contained within a review

of the internal marketing literature. A methodological discussion follows about internal

marketing as a competitive advantage. The follow-on discussion of internal marketing mix notes

the symbiotic relation extant between internal marketing and external marketing. Also discussed

thereafter are research methodologies, the role of environment, and environment forces within

the context of internal marketing. Although research methodologies is discussed earlier in the

paper, due to it being identified as a specific topical question, the proposal ends with a brief

discussion committing to the conduct of an environmental analysis to identify opportunities and

threats in the marketplace and strengths and weaknesses of the local government organization

using the internal marketing paradigm.

PROJECT PROPOSAL 3

The Usefulness of Internal Marketing in Local Government Image Building

Berthon and Katsikeas (1998) wrote that a sense of urgency, they characterized as the

―ephemeral now,‖ now characterizes society and organizations. Kreigel and Brandt (1996)

lamented ―…everyone is restructuring, reorganizing, reinventing, downsizing, outsourcing-all at

an ultrasonic pace‖ (p. 2). While various scholars, historically, to explain the sheer complexity

of organizations and promote service delivery excellence, suggested a variety of theories, the

citizen-customers of government rarely regard local government as service delivery excellent.

The image citizen-customers have of their local government is in large part due to their

interactions with the employees of that government (Lee, 1998). Lewis and Entwistle (1990)

concluded that when it comes to services, customer satisfaction and customer dissatisfaction

occurs when front-line employee and customer interact. In other words, there is a causal link

between external customer satisfaction and the contribution made by the customer contact

employee providing the service (Taylor and Baker, 1994). Noting that causal link, Bansal,

Mendelson, and Sharma (2001) recommended that businesses develop marketing programs for

contemporaneous application to its internal market and external market. It seems reasonable to

assume that this causal link extends to local government where the predominant service delivery

model mimics the service sector.

The question, ―Are the employees oriented and attuned to serve according to citizen-

customer expectations?‖ is a question that underlays this proposal. According to Kotler and Levy

(1969), because "everything about an organization talks (p. 13)," each organization-public

contact leaves citizen-customers with an image of that government. Grunig (1997) also noted

that the image citizens have of their local government is due in significant part to their

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interactions with government employees, but went further to note that governmental employees

are not often aware of their role in creating image.

Given the local government service similarity to service sector services, this proposal

suggests that internal marketing may likewise offer to local government the tool for improving

service delivery. While there is an apparent dearth of literature specifically discussing the

application of internal marketing in local government, this proposal recognizes and the larger

paper will discuss the similarities between public and service sectors. Using findings gleaned

from the scholarly literature it seeks to develop an internal marketing strategy for instilling a

customer service mindset in government employees. It begins with a review of the literature,

noting, inter alia, operational definitions for marketing and internal marketing. Next, because,

according to Luan and Sudhir (2010), methodology is a requisite of good marketing strategy, the

proposal discusses research methodologies identified in marketing literature that will eventually

underlie the marketing strategy. How to bring about such organization-wide recognition and

reorient employees to adopt a customer-service orientation is the ultimate goal of this proposal

and the larger paper. This proposal includes a brief discussion of the internal marketing

environment and the forces that impact environment. Accordingly, the final project is will

conduct an analysis of the external and internal forces affecting a local government organization.

The role of segmentation in the proposed internal marketing strategy formulation will also be

included. The final project will then suggest an internal marketing model for local governments.

Literature Review

The literature contains several definitions of internal marketing. According to Ahmed

and Rafiq (2002), internal marketing is a planned effort using a marketing-like approach directed

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at motivating employees, for implementing and integrating organizational strategies towards

customer orientation. Hogg and Carter (2000) noted the dependent relationship between internal

marketing and market orientation in that organizational values are actually communicated using

marketing techniques deployed within the organization.

The research of Anderson (1966), Kotler and Levy (1969), and Lee (1998) revealed that

it is now commonplace for local governments to market themselves to their citizen-customers.

The clear implication is that the current recessionary fiscal climate and an increasingly cynical

but demanding citizenry necessitate a more market orientation by local governments in the

delivery of their services. Flattened organizational structures have been replacing hierarchical

structures and government executives expect employees to be customer-centric and efficient. No

longer are consumers of government services citizens, they are customers who consume and pay

for, via fees and taxes, local government goods, services, and ideals. In such an environment,

local government must create an image in the minds of its customers, who are residents, business

owners, and employees (Lee, 1998). Trueman, Klemm, and Giroud (2004) made the case that

―poor perceptions of a city can devalue its image and have far reaching consequences for future

prosperity. These negative associations may reduce the likelihood of inward investment,

undermine business community activities and have a detrimental effect on the number of visitors,

thereby exacerbating urban decline‖ (p. 317). Installing customer oriented service delivery or

creating a customer-centric organization, was a central tenet of the author‘s leadership of the

government of Greenville County from 1994 until 2000 and is today a common goal of local

government executives (McCallum, Spencer, & Wyly, 2005, p. 25). Hatch and Schultz (2008)

noted that customer-centric reveals itself via the organizational engagement of the following six

tactics: branding, media relations, in-house publications, use of outside organizations or

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volunteers as public relations tools, public art, and built environment via sustainability. The

larger paper will include a detailed discussion of each of the six tactics. Lee (2000) distinguished

the first three as the more common tactics of governmental public relations.

Anecdotally, the author‘s personal experiences affirm the challenging nature attendant to

installing and instilling this customer service mindset within local government. The work of

several researchers, for example, Berry, Conant, and Parasuraman (1991), Heskett, James, Jones,

Loverman, Sasser, and Schlesinger (1994), and Berry (2002) revealed that internal marketing has

been an effective tool deployed in the private sector to encourage frontline employee high

performance by being supportive of their needs and in turn facilitating exceptional service to

fellow employees and customers. The research of Tansuhaj, Randall and McCullough (1991)

revealed a customer service mindset actually facilitates job satisfaction. Rafig and Ahmed

(2000) and Conduit and Movondo (2001) found a positive relation between the deployment of

internal marketing and customer-centric orientation and performance of service organizations.

Internal Market as a Competitive Advantage

Competitive advantage exists when the strategy used by and organization may not be

imitated by competitors, or will take the competitors a high cost to imitate (Hitt, Ireland, and

Hoskisson, 2007). An organization with competitive advantage performs specific tasks with

greater efficiency than competitors or performs tasks at a level of quality not replicable by

competitors (Hitt, Miller, and Coella, 2006). While it is accurate that local governments, for most

services, operate in a monopoly environment, it is possible to establish a benchmark for those

services. By performing more effectively than provides subject to the benchmark, the

organization will be able to provide more valuable products and services to the customers. The

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competitive advantage, the resources and the capabilities of an organization is valuable, rare,

irreplaceable and incapable of being imitated (Hitt et al., 2007). Therefore, the definition of

competitive advantage includes a skillful, motivated and flexible workforce in addition to

technology and economic scale.

Piercy (2002) noted that internal marketing has the goal of developing a type of

marketing program that is aimed at the internal marketplace in the company that parallels and

matches the marketing program aimed at the external marketplace of customers and competitors.

Hitt, Ireland and Hoskisson (2007) identified internal marketing as a competitive advantage since

it concerns itself with becoming a customer-centric as a core competency. Greene, Walls and

Schrest (1994) noted that internal marketing is a key to successfully serving the external

customers of an organization. Berry (1980) noted that ―The same marketing tools used to draw

bank customers can serve to attract and retain the best employees, and earn the best performance

from them‖ (p. 33). Gronroos (1981) viewed internal marketing as a means through which

employees may attain workplace satisfaction and a customer-centric demeanor and outlook.

This is because the organization recognizes and treats employees as constituting the

organization‘s internal market and meeting the needs of the internal customers is essential to the

success of the organization in external market.

Varey (1995) and Cahill (1995) viewed employees as human capital and it is that the

source of sustainable value for an organization is human capital coupled with intangible assets.

Gronross (2000) noted that internal marketing focuses on establishing proper internal relations

within each organization, which promote a customer-centric approach to service between

employees and external customers.

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Internal Marketing Mix

Piercy and Morgan (1991) and Rafiq and Ahmed (1993) elaborated on the concept of

internal marketing noting the existence of internal marketing mixture, which is the using internal

distribution, communication, price and product will facilitate the process of organizational

change through techniques and systems, the structure of power and political culture inside the

organization. Rafiq and Ahmed (1993) specifically the internal marketing mix as the values and

attitudes needed by employees to achieve successful marketing strategies and training courses to

promote the knowledge of the internal customers. Price, therefore, for example, they defined as

an expense that the employees make to obtain new knowledge. Internal promotion has been

considered as an effective relation with the employees, such as using face-to-face interactions,

recognition and reward systems. They also pointed out to the means of products distribution to

the internal customers as an internal place. These means of distribution may be presented in such

forms as official meetings and using consultants to provide advanced inter-organizational

training. The Rafiq and Ahmed (2000) analysis also noted that marketing‘s four P‘s applies in

the internal marketing dynamic in a typical organization.

Kotler and Armstrong (1999) argued that internal marketing facilitates value internally

and externally to the organization. Internal marketing and external marketing therefore exist

symbiotically but are different in the internal marketing mix. Specifically, internal marketing

focuses on internal market and external marketing focuses on external customers and market.

Product is a key element of the external marketing mixture. In internal marketing, product exists

on three levels: fundamental, strategic and duty. At the fundamental level product is a job. At the

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strategic level, product includes values and attitudes extant in the organization. At the duty level

product consists of any functional measures and customer management.

Research Methodologies Identified in Marketing Literature

According to The American Marketing Association (2007) marketing research "…links

the consumer, customer, and public to the marketer through information—information used to

identify and define marketing opportunities and problems; generate, refine, and evaluate

marketing actions; monitor marketing performance; and improve understanding of marketing as

a process." Quantitative research when compared to qualitative research, not only investigates

activity, it seeks behavioral and attitudinal validation through the measuring and tracking of

occurrences and/or responses to arrive at projections and predictions. In a 2004 ―white paper,‖

Merkle Thought Leadership Series defined quantitative marketing as ―the utilization of facts and

knowledge to better understand the behaviors of consumers across the marketing enterprise to

maximize marketing investment‖ (p. 4). Parasuraman, Grewal, and Krishnan (2007) defined

marketing research as a set of techniques and principles for collecting and analyzing data in

order to facilitate decision making about marketing the products, services, or ideas of an

organization (p. 9). The several approaches that constitute the portfolio of techniques include

observational research, experiments, ethnographic research, and survey research (Tyagi, 2010).

The goal of market research is to provide an organization with information about

customers, competitors, and the environment in which it operates in order that it may achieve

competitive advantage. Perhaps the fundamental issues undergirding this discussion is

marketing‘s search for a definitive means through which organizations may decide the amount of

money and level of resources to allocate to influencing the purchase behavior of consumers to

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generate sales to achieve the profit goals of the organization (Farris, Bendle, Pfeifer, and

Reibstein, 2006, p. 19).

Willis and Webb (2006) correctly noted that ―first-class customer insight‖ is requisite for

strategic planning and marketing if a business is to maximize its revenue generating

opportunities. Attaining the necessary data attendant to customer insight is possible through a

variety of analytical methodologies, two of which, qualitative and systems theory, are the subject

of this post. Specifically, this post cites definitions qualitative analysis and systems theory

offered in the literature, noting contrasts, similarities, and divergences.

Whitchurch and Constatine (1993) defined systems theory as the basic notion that objects

extant in the world are interrelated and that the relationships may be investigated using

mathematical models. This definition is derivative of that originally expressed, according to

Kaszlo (2003) by Ludwid von Bertalanffy. A quick re-reading of Bertalanffy‘s book, General

System Theory, revealed him a biologist whose formulation derived from his work in general

system theory (1968). Merker and Lusher (1987) saw in systems theory a means to evaluate and

attain understanding of organizations, particularly in terms of organizational effectiveness

viewed via its structure and processes. Reidenback and Olivia (1981) previously noted systems

theory offered promise as a marketing analytical tool and methodology for inducing, transducing,

exploring, maximizing, and tracking consumer consumption. It is, however, not econometrically

dependent.

Quantitative research methodologies are fundamentally deductive, that is deploying

econometrics and mathematical modeling to formulate or postulate a theory or hypothesis to

observation. Central to quantitative marketing is ―the utilization of facts and knowledge to better

understand the behaviors of consumers across the marketing enterprise to maximize marketing

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investment‖ (Merkle Thought Leadership Series, 2004, p. 4). It is an examination of a

―snapshot.‖ Quantitative methodologies are especially suitable when applied to issues well

defined in scope and scale (Churchill, 1995; Craig and Douglas, 2001). This approach stands in

stark contrast to the inductive, analysis as a function of moving from observation to theory

postulation, character of qualitative research methodologies. Qualitative research proceeds from

a epistemological underpinning different from quantitative methodologies that consumer

information is social and not technical (Robertshaw, 2007). Qualitative research, somewhat

similar to systems theory, does not depend on statistical analysis but, epistemologically, relies

heavily on analysis based on general observations, there from which emerges a general theory.

The process is dynamic and organic due to the complexity attendant to human behaviors.

Qualitative research techniques are typically unstructured and include such exploratory

techniques as group discussions and in-depth interviews (Maxwell, 1997).

In something of a divergence from qualitative research, systems theory clinically studies

such factors as technology, behavior, or environment. Qualitative research is field based and

dependent on high interaction between researcher and researched (Mellow and Flint, 2009).

Maxwell (1997) identified circumstances that warrant qualitative methodologies: the need to

understand meaning that underlay events, activities, situations, and behaviors; the need to

understand context and the role of influence; the need to understand and postulate grounded

theories regarding unanticipated phenomena; the need to understand the relationship between

process and outcome; and, the need to understand causal relationships and provide causal

explanations. Fielding (2007), discussing the merits of consumer research panels, also

acknowledged the importance of interaction between researcher and phenomena under study and

that that interaction should not be avoided or dissuaded. Social opportunities should be

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embraced as a potential source of valuable information for analysis to determine the genesis of a

matter (Mellow and Flint, 2009). Ruyter and Scholl (1998) concluded that qualitative

methodologies may actually help decision-makers and researchers decipher and uncover

meaning that may underlay numbers.

As noted earlier, a review of the literature revealed little research about the application of

internal marketing in local government; instead, empirical research tended to address the service

sector. To measure internal marketing, Foreman and Money (1995) and Money and Foreman

(1996) developed a 15-item questionnaire consisting of three underlying factors vision (giving

employees something to believe in), development (items having to do with rewarding

employees) and reward (items having to do with developing employees). Caruana and Calleya

(1998) and Ewing and Caruana (1999) applied this questionnaire in their respective empirical

surveys. Quester and Kelly (1999) noted the importance of inclusiveness and organization-wide

commitment when they concluded, ―the implementation of IM is carried by a combination of

people such as the marketing manager, the managing director and particularly the human

resources manager who are highly involved in planning IM‖ (p.224).

In the final paper, the author will utilize remote environment, industry environment, and

operating environment analysis, formally called environmental analysis, since it permits analysis

of both external and internal forces impacting an organization. The remote environment analysis

examines factors external to the business that affect the business. The remote environment is

comprised of five factors: political, economic, social, technological, and ecological. Political

factors include laws, regulations, and governmental policies. Economic factors include local and

national market conditions, unemployment rates and interest rates. Social factors include values,

beliefs, and lifestyles choices that impact the market. Ecological factors include environmental

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concerns and such thinks as global warming, and conservation efforts. The industry environment

analysis examines competition. The operating environment analysis is the final step.

Internal and External Forces

Forces from outside and inside impact organization, often necessitating change (Brown

and Eisenhardt, 1998).Oakland and Tanner (2007) identified stakeholder demands, customer

demands, regulatory demands, market competition, and shareholder demands as the primary

external forces that affect organizations. Regarding internal forces, Oakland and Tanner (2007)

identified the need for process improvements, the need for increased operational efficiency, and

the need for increased quality in products and services. According to Oakland and Tanner (p. 1-

19) identified four major external forces: demographic, technological, market changes, and social

and political pressures. Internal forces emanate from within an organization and include low

morale, low productivity, or conflict (p. 1-19). Huy (2001) noted that leaders of organizations

must seek to attain understanding of these forces since, no matter how unsettling, intimidating, or

uncomfortable, they can have a profound effect on the organization. The author proposes to

discuss in the larger paper how external and internal forces may marketing strategy. For

example, Howell (2005) noted that employees tend to resist change brought on by marketing

research. Goodman and Rousseau (2004) noted this is because many employees regard any

change, even that based on study, as inconvenience and fear of uncertainty. Recardo (1991)

noted the existence of eight tactics that organizations should deploy to effect excellent service

delivery: education of the workforce, provide dialogue communication, use and involve

impacted groups, provide a merit reward system, avoid mixed signals, and modify subsystems to

effect self-determinant decision making, and supply adequate resources. The larger paper will

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use Lewin (1964) change model to review the impact of internal and external forces on

marketing strategy.

Internal Marketing Environment

A tenet of internal marketing is that the operational effectiveness of management

functions of organizations are enhanced when they operate in union and alliance (Ahmed and

Rafiq, 2003). A key success indicator for any organization is products and/or services supported

by the ―customers‖ of that organization. Marketers therefore focus on creating value for and

building meaningful relationships with customers, endeavors that require marketers to attain

insight into what customers need and want.

Fundamentally, the process for creating value and building relationships with customers

require information about existing and prospective customers and current and future value

(Sawhney, Schieffer and Leininger, 2008, p.31—37). Quantitative analytical techniques are

rooted in the importance of understanding the consumer and therefore have emerged as perhaps

the most ―state-of-the-art‖ tool for attaining an understanding of consumers. ―[T]ransforming

today‘s vast, ever-increasing volume of consumer information into actionable marketing

insights…is the number one challenge for marketers (Fassnacht, 2007 p.15).

When contrasted with qualitative techniques, with its emphasis on process and direct

interaction with those under study, quantitative techniques focus on attaining quantifiable,

reliable data that can be generalizable to either an existing base of customers or a target customer

base. In other words, the quantitative paradigm has its significant advantages, inter alia, being

more efficient, timely, and cost-effective (Gelb 2006).

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Thus, it becomes necessary to attain an understanding of the internal market environment.

Internal marketing acknowledges the value of an environment of inclusiveness and participation.

This is the essential conclusion of the Ahmed and Rafiq (2003) research, that organizational

success requires that every employee is involved in and committed to the high performance

through the customer-supplier chain. Gounaris (2008) thus noted internal marketing relies on

satisfying employee needs antecedent and as a facilitating requisite to satisfying customer needs.

Intuitively, market area rules therefore apply to the internal market of the organization. Voss,

Calantone, and Keller (2005) rightly concluded that employees are the internal suppliers and

customers of the business and that the internal market of an organization encompasses its

employees. By application and extension, managers in local government must create a similar

internal environment supportive and empowering of customer centered employees.

External Environment and Markets

Critical to the analysis are definitions for organization, environment, and organizational

effectiveness. Cherrington (1989) defined an organization as an open social system wherein the

patterned activities of goal-directed people occur. A system, open or closed, acquires inputs

from the environment and transforms those elements into outputs that the environment acquires.

Patterned activities are events that occur with consistency and regularity. Viewing this

interaction between organization and the environment as a system of patterned activities sets the

stage for analysis intentioned to identify problems and opportunities and subsequently,

organizational effectiveness. An early feature of organizational analysis is the identification and

subsequent evaluation of these patterned activities, which, in reality, are events that occur.

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The purpose of organizations, amongst other things, is the efficient and effective delivery

of goods and services to consumers. The delivery of goods and services to consumers is an

organizational event influenced by environment. The environment includes the quality-

expectant consumer as well as other organizations. Forces that comprise the environment

include economic conditions, competition, social customs, mores and changing labor, and

government and enacted laws. Whether there is a relationship between the environment and

organizations is important because environments provide the raw material inputs and acquires

the transformed inputs as outputs. This two-way flow serves as a generic characterization of the

relationship between an organization and its environment. Making the point that most

organization attempt to influence their environment, Starbuck (1976) wrote ―…environments are

largely invented by organizations themselves. Organizations select their environments from

ranges of alternatives, then they subjectively perceive the environments they inhabit‖ (p.1069).

That said, the organization must attain resources from the environment and export those

resources back to the environment or the organization‘s viability eventually ceases.

Organizational effectiveness, although admittedly difficult to conceptualize (Chelladurai,

1987), refers to how well an organization achieves its goals and objectives (Herman and Renz,

2004). Survival is the ultimate measure of organizational effectiveness. By that criteria alone,

local governments, rarely ten years old, are effective. However, longevity alone is insufficient

since a variety of variables combine to communicate effectiveness. Efficiency refers to how well

the organization converts inputs into outputs.

By contrast, effectiveness speaks to how well products and/or services are produced or

delivered and then recycled in the environment back into usable inputs for the organization.

Chelladurai and Haggerty (1991) identified four approaches to measure organizational

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effectiveness: the goal approach, the system approach, the process approach, and the multiple

constituency approach. The goal approach to evaluation is consistent with modernist thinking

and widely used (Herman and Renz, 2004; Weese, 1997). The goal approach assesses

organizational effectiveness in terms of an organization‘s realization of its goals (Pratt and

Eitzen, 1989). The social constructionism approach to evaluation (Herman and Renz, 2004),

also called the process approach by Chelladurai and Haggerty, 1991) is consistent with post-

modernist thinking. The process approach focuses on functioning and integration or the

smoothness and efficiency of the internal processes and general operation of an organization,

recognizing that component efficiency does not necessarily translate into an efficient whole

(Weese, 1997, p. 267).

The larger paper will elaborate on these approaches and use them together to determine

organization effectiveness. Herman and Renz (2004) suggested such an approach as appropriate

for non-profit organizations. Variables include pressures in and on the labor force, social

customs evolution, economic conditions challenges, laws, expectations and standards set by the

government.

To facilitate organizational analysis and understanding of organizational opportunities,

Bain (1956) suggested examining the structure of an industry at the market level. A market

represents the systemic infrastructure in which a business sells its goods and/or services

(Sheffrin, 2003). Consistent with the suggestions of Bain (1956), economists grouped markets

into industries and industries into four market structures: pure competition, monopoly,

monopolistic competition, and oligopoly (McConnell and Brue, 2004; Barney, 2007).

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Pure competition markets are easy to enter. Consumers purchase primarily on the basis

of price. Monopoly markets exist when one organization provides services in a single industry

(Barney, 2007). A monopoly also exists when there are other service providers but one

organization dominates and the consumers either cannot or have not purchased the alternative

wares; i.e., if there is an alternative to electricity from a dominant electrical provider it would be

fire wood for pot belly stoves (p. 42). Similarly, water companies tend to exists as monopolies,

with the only alternative available to consumers is bottled water, which is not practical for such

high volume needs as dish and clothes washing. In monopolistic competition markets several,

perhaps many, organizations sell several different products and/or services (p. 42). The

restaurant industry is an example of monopolistic competition. Finally, oligopoly markets are

comprised of few companies selling similar products and/or services (p. 42). Hospitals are

examples of oligopolies.

These market structures thus serve as a kind of short-hand to describe the organization of

a market in terms of certain characteristics: number of firms operating within that market;

barriers to new companies entering that market; ability to control product pricing; and, the

existence of product differentiation.

In oligopolies, prices tend to be either identical to or indistinguishable from the

competition. In monopolistic competition, several organizations produce similar but

differentiated products or services. Each organization establishes price, usually based on

quantity, but without affecting the market. In a monopoly, the monopolist company may be the

price setter but is restricted in its ability to set price based on full cost recoupment, usually due to

government regulation. By contrast, in a purely competitive market because market entry and

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exit is easy a company‘s ability to set price is restricted to prevailing industry pricing

(McConnell and Brue, 2004).

The market environment in which local governments tend to operate is monopoly. Not

only do they operate as monopolies, local government organizations are typically modernist.

According to modernist perspective, the relationship between organizations and their

environment is isomorphic (Hatch and Cunliffe, 2006). Hofstadter (1979) defined a isomorphic

relationship as one in which ―…two complex structures can be mapped onto each other, in such a

way that to each part of one structure there is a corresponding part in the other structure, where

"corresponding" means that the two parts play similar roles in their respective structures‖ (p. 49).

Not only isomorphic, the modernist perspective tends to view organizational effectiveness is a

matter of how well an organization and its environment can recycle or convert inputs into

outputs and transform or translate them into new resources to repeat the cycle continuously. Any

uncertainty in the environment is to be managed rather than feared. This approach therefore is

fundamentally tri-dimensional, involving organizational adaptability or how well the

organization responds to change; development or how well an organization self-invests; and,

survivability or how well the organization sustains itself, over the long-term, within the

environment.

This stands in contrast to the post-modernist view that the relationship between

organization and environment is ―deconstructionist.‖ To capture the difference between

modernist and post-modernist, researchers deployed a variety of adjectives. For example,

Cooper and Burrell (1988) used the modern and post-modern labels, which they also

characterized as strong versus weak. Derida (1976) did not view the two views as opposites or

opposing; instead he viewed them as supplemental, i.e., implicit within each, especially the post-

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modernist perspective, is both recognition and articulation of the other. In other words, the

views are inextricably intertwined (Lyotard, 1992), with the post-modernist view tending to

place more emphasis on the sociological and process aspects of organizations versus modernist‘s

placing more ontological emphasis on the communitarian aspect and impact of the organization

and its environment on individuals, the organization itself, and society.

The Role of Segmentation

Markets can be segmented in many different ways: by product or service needs, by

sensitivity to price, by geographic area, by demographic segment, or by psychographics and

lifestyles. Successful segmentation depends on understanding what consumers need, how groups

of consumers differ from one another, and how consumers decide among products. Foedermayr

and Diamantopoulos (2008) defined market segmentation, ―…as the ‗process of subdividing a

market into distinct subsets of customers that behave in the same way or have similar needs‖ (p.

223). Market segmentation is concerned with classification of customers and consumption and

when enacted, market segmentation usually turns to or is based upon the relationships which

follow‖ (Tonks, 2009, p. 346). Tonks (2009) also approached the discussion of market

segmentation from a managerial perspective using the foundational elements of competitive and

diverse markets, a financial impetus, a strategic and operational purpose and the affective

priority given to customer satisfaction and using this data as a science. ―The scientific resource

allocation approach to market segmentation theory was certainly prevalent in the 1960s and

1970s, coinciding with the normative approaches to marketing more generally‖ (Tonks, 2009, p.

349).

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There are many different ways to carry out market segmentation. One way is via a

quantitative survey-based approach using multivariate analysis to identify segments. A

disadvantage of this method bring wholesale changes to customer groups and target markets,

demanding a complete realignment of internal structures and personnel. Within a comparison of

conceptual models a discussion of evaluation, risks and benefits will be analyzed.

Customer segmentation encompasses several methods. The most important is deciding on

the segmentation method(s). Foedermayr and Diamantopoulos (2008) classified segmentation

methods into a-priori versus post hoc methods and into descriptive versus predictive methods.

An a priori market segmentation model is based on industry, number of employees, revenues or

geographic location. A consumer-based a priori segmentation model could be based on

education, age, income or gender, for example. The advantage of an a priori segmentation model

is that it can be developed quickly and inexpensively. The main drawback is that a priori models

provide few insights into how best to refine a product marketing strategy. A company can try to

sell or deliver service to everyone, which is mass-marketing, or it can focus its efforts on target

segments, which is segmentation-marketing. Mass-marketing is expensive and ineffective. A

market segmentation study identifies groups of people who are likely to purchase, or in the case

of government, use, a particular product or service. This knowledge allows an organization to

focus its product development, advertising, selling resources, and service delivery system in a

way to maximize sales and profitability. By contrast, a post hoc segmentation model is

empirically derived from data collected in a market research survey. Segmentation models can be

derived from a variety of input or basis variables, such as benefits sought, product attribute

preferences, values, product usage, brand preference, and price sensitivity. The goal of the

PROJECT PROPOSAL 22

segmentation analysis is to identify groups of respondents who provide similar answers to the

basis questions.

Conclusion

This proposal has discussed a proposal to examine the application of internal marketing

as a tool local government may use to improve its image and service delivery. Acknowledging

the dearth of literature specifically discussing the application of internal marketing in local

government, the paper noted that larger paper will discuss the similarities between public and

service sectors. Based on a review of the literature, the proposal‘s goal is to develop an internal

marketing strategy for instilling a customer service mindset in government employees.

Discussion included operational definitions for marketing and internal marketing, research

methodologies identified in marketing literature that will eventually underlie the marketing

strategy, and a discussion about the means deployable to bring about such organization-wide

recognition and reorient employees to adopt a customer-service orientation. This proposal

included a brief discussion of the internal marketing environment and the forces that impact

environment and suggested a formal environmental analysis of the external and internal forces

affecting a local government organization as significant feature of the final paper.

PROJECT PROPOSAL 23

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