Chapter 10: Internal Marketing

Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Internal Marketing

The Internal Marketing concept states; that the internal market of employees is the 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.

Source: Christian Gronroos Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Importance of Internal Marketing

• Employees must have a customer service attitude • Employees must understand your product • Employees must be enthused about your product and your company • There must be good communication between employees and management • Employees must be able to identify and solve customer problems Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Objectives

• 1. To ensure that employees are motivated for customer-oriented and service-minded performance.

• 2. To retain good employees.

• 3. To increase customer satisfaction • 4. To increase profitability Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Internal Marketing Process

• Establish a service culture • Development of a marketing approach to human resource management • Dissemination of marketing information to employees • Implementation of a reward and recognition program Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Establish a service culture

Culture

Shared philosophies, ideologies, values, beliefs, expectations, and norms Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Establish a service culture (cont’) Developing a Customer Oriented Organization

• 1. Business mission-- managers supervisors and other -- to accept it.

• 2. Develop service-oriented management and leadership-- Service Culture- – Management encourages service mindedness and customer orientation of the employees Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

Upper Saddle River, NJ 07458 7

Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

Upper Saddle River, NJ 07458 8

Development of a Marketing Approach to Human Resources Management

Human systems need some glue, some central theme or themes around which behavior can coalesce. - Katz and Kahn Developing a service culture usually means a change in management behavior and reward systems.

Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

Upper Saddle River, NJ 07458 9

The Relationship Between the Marketing Function and the Marketing Department Source: Gronroos, “Designing a Long Range Marketing Strategy for Services,“ Long Range Planning (April 1980), P. 40.

Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

Upper Saddle River, NJ 07458 10

Development of a Marketing Approach to Human Resources Management (cont’) • Creating jobs that attract good employees • A hiring process • Teamwork • The importance of initial training • Continuous training • Employee involvement in uniform selection • Managing emotional labor Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Dissemination of Marketing Information to Employees

• Information helps employees to solve guest problems. • Employees should hear about promotions, new products, upcoming event, and ad campaigns from management.

• Hospitality organizations can communicate with their employees by employee newsletter, in-house newsletter, personal communication, and technology.

Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

Upper Saddle River, NJ 07458 12

Implementation of a Reward Recognition System

• Employees must know how they are doing to perform effectively.

• The results of any service measurement should communicate with employees • Most reward systems based on meeting cost objectives and achieving sales objectives. A few companies give rewards based on customer satisfaction.

Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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Non-routine transactions

Non-routine transactions: outstanding service opportunities.

Empowerment Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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• 3. Use marketing techniques to target employees and develop an attractive packages for those employees.

– Market Research – "Deep Sensing" – Market Segmentation – Product, Price, Promotion-- Distribution – Market Segmentation Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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• 4. Hire customer oriented employees • 5. Train employees – Develop a pride in the organization and its products – Teach all employees service-oriented communications and interaction skills.

• 6. Market to employees before marketing to consumers Marketing for Hospitality and Tourism, 3e Philip Kotler, John Bowen, James Makens ©2003 Pearson Education, Inc.

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