CHAPTER ONE

INTRODUCTION

1. BACKGROUND OF THE STUDY

Internal marketing was originally defined as making internal products (jobs) available to satisfy the needs of internal market (employees) so that it satisfies organizational objectives (Berry, et.al., 2006). The authors go on to add that a firm has to successfully hire, train and motivate employees to serve external customers since the needs of external customers can be satisfied partly because the needs of the firm’s internal customers (employees) are satisfied. Marketing aimed at internal customers is called internal marketing (Gronroos, 2001). However, since then, there have been a number of definitions of internal marketing and there is no unifying notion (Rafiq & Ahmed, 1993). For instance, George (1977) and Berry (1980) state that in order to keep external customers happy and satisfied the company’s internal customers (employees) should be happy in their jobs. Internal marketing’s goal is to hire, train and motivate employees so that they serve their customers well (Kotler, 1991), and to treat employees as customers (Berry & Parasuraman, 1991).

Many organizations and researchers have recognized the importance of internal marketing (IM) in increasing employees’ commitment with the organizations and customer satisfaction (L. Berry & Parasuraman, 1992; Conduit, Matanda, & Mavondo, 2014; Grönroos, 1990; Kotler, 1998; Lee, Chen, & Lee, 2015; Lings & Greenley, 2009; Pitt & Foreman, 1998; Shiu & Yu, 2010). The concern of the marketing department with consumer satisfaction has been largely addressed (Oliver, 2010), and IM is one of the main tools to institutionalize marketing orientation, (Conduit & Mavondo, 2001; Ferdous, Herington, & Merrilees, 2013; Ferdous & Polonsky, 2014; Lings & Greenley, 2009; Zeithaml, Parasuraman, & Berry, 1990). Originally, IM was developed to achieve external customers satisfaction (L. Berry & Parasuraman, 1992; Flipo, 1986; Grönroos, 1990; Kotler, 1998). It is possible to recognize IM as a strategy to practice organizational beliefs and focus on the market. Studies have also demonstrated that IM have an impact on further dimensions such as performance (Lings & Greenley, 2009), employee satisfaction (Shiu & Yu, 2010), and organizational commitment (Caruana & Calleya, 1998; Yang, Huang, & Wei, 2015), among others.

In today’s competitive business environment, salespeople’s collaborative efforts play a major role in building and sustaining buyer-seller relationships (Darmon, 2004). Importantly, efforts to build productive buyer-seller relationships and to execute customer-centric tasks require close collaboration between salespeople and members of other functional units within the organization; to the extent that achieving customer satisfaction demands collaborative exchanges between a diverse set of organizational members (Steward et al., 2010; Enz & Lambert, 2015). While collaborative efforts between salespeople and members of other functional units may help create greater customer satisfaction outcomes, the nature of the sales function mandates that salespeople operate beyond the borders of their organization, which consequently limits their involvement in internal organizational social exchange processes (Dubinsky et al., 1986). As boundary spanners committed to forming and nurturing relationships with external customers, there is a risk that salespeople may become alienated from internal organizational stakeholders, potentially jeopardizing smooth collaborative exchanges between salespeople and members of other functional units (Tanner et al., 2015). Despite its importance to sales organizations, scholarly understanding of how and when internal collaborative exchanges between salespeople and other organizational members is developed and leveraged for customer satisfaction remains under-researched. To address this gap in the sales literature, this study draws insights from the intra-firm knowledge, social identity and social exchange literature (e.g. Floyd & Lane, 2000; De Clercq & Sapienza, 2006; Tajfel & Turner, 1979) to propose that customer satisfaction is enhanced when firms leverage resources across functional units to aid salespeople’s efforts to address customer needs. However, the process of satisfying customer needs is surrounded by evolving uncertainties with respect to the level of the resource contribution of key internal stakeholders. The knowledge exchange literature suggests that the resources under consideration (e.g. sales knowledge, market information, customer database, knowledge on competition) required to reduce this uncertainty about customer satisfaction creation is often dispersed across different functional units, usually used as a source of power, and therefore not readily shared among functional units (Kim & Mauborgne, 1998). Leveraging such dispersedly distributed resources to create a superior market offering requires collaborative exchanges among all organizational members in possession of such resources (Nonaka, 1994). On this front, this study proposes that internal marketing (IM) may play a vital role in fostering collaborative exchanges between salespeople and members of other functional units. The study argues that a firm’s ability to align and attain compatibility in terms of customer satisfaction goals across functional units is a channel through which IM can lead to customer satisfaction. Furthermore, following social identification and social exchange theories, this study argues that the effect of IM on customer satisfaction via cross-functional goal compatibility is strengthened when salespeople are effectively connected to other organizational members outside the sales function. The study contends that the more a salesperson is willing to engage with employees from other functional units in an organization (e.g. finances, accounting, manufacturing, and marketing), the more likely it is that cross-functional goal compatibility becomes a successful transfer mechanism of IM activities to customer satisfaction outcomes. Thus, this study proposes the notion of salesperson cross-functional connectivity as a potential moderator of the indirect effect of IM, via cross-functional goal compatibility, on customer satisfaction.

1. STATEMENT OF THE PROBLEM

Investigations have shown that concentrating in on employees’ satisfaction diminishes employee's migration and their change obstruction. At the other hand improving employees' capacities brings about help quality, development and risk taking which increases organizational profitability and makes more steadfast customers. Workers are the principle elements in any assistance area. So in any organization, consumer satisfaction is attached to how administrations are introduced to them; additionally we realize that help quality is exceptionally influenced with how fulfilled are the employees with the organization. As such, representative's fulfillment (interior customers) influences administration quality contributions and brings organization's client's (outside customers) fulfillment. In assistance giving organizations it is one of the everyday difficulties to inspire employees so they assume their hierarchical parts well and to draw in their fulfillment with the goal that they improve administration contributions to the outside customers (Cooper and Cronin, 2000) Internal marketing is one of the primary techniques for administration organizations in which organizations attempt to advance the authoritative climate to improve administration quality. This methodology helps administration area organizations in worldwide intense contention altogether. If an organization is not able to meet its internal customer’s needs, how is it to meet its external customer’s needs? So regarding the internal customer’s satisfaction and its effect on external customer’s satisfaction it is important to insurance companies to consider this strategy to make better competitive advantages.

1.3 AIM AND OBJECTIVES OF THE STUDY

The study seeks to examine internal marketing and customer satisfaction in the banking sector in Nigeria. The objectives of the study are:

1. To determine the relationship between internal marketing and customer satisfaction in the banking sector in Nigeria
2. To determine the effectiveness of internal marketing towards achieving customer satisfaction in the Nigerian banking sector
3. To determine the factors affecting internal marketing and customer satisfaction in the Nigerian banking sector
4. To recommends ways to improve internal marketing and customer satisfaction in the banking sector of Nigeria

1.4 RESEARCH QUESTIONS

The following research questions guide the objectives of the study:

1. What is the relationship between internal marketing and customer satisfaction in the banking sector of Nigeria?
2. What is the effectiveness of internal marketing towards achieving customer satisfaction in the Nigerian banking sector?
3. What are the factors affecting internal marketing and customer satisfaction in the Nigerian banking sector?
4. What are the ways to improve internal marketing and customer satisfaction in the banking sector of Nigeria?

1.5 STATEMENT OF THE HYPOTHESIS

H0: there is no significant relationship between internal marketing and customer satisfaction in the banking sector of Nigeria

H1: there is significant relationship between internal marketing and customer satisfaction in the banking sector of Nigeria

1.6 SIGNIFICANCE OF THE STUDY

The study will be of immense benefit to the entire banking sector of Nigeria. The study will establish a correlation between internal marketing and customer satisfaction in the banking sector in Nigeria.

To other researchers and students, the study will serve of as a source of materials and information on internal marketing and customer satisfaction in the banking sector in Nigeria.

Finally the study will contribute to the body of the existing literature on internal marketing and customer satisfaction in the banking sector in Nigeria

1.7 SCOPE OF THE STUDY

The study covers on internal marketing and customer satisfaction in the banking sector in Nigeria with focus on the commercial banks in Nigeria

1.8 LIMITATION OF THE STUDY

TIME CONSTRAINTS: One the challenges experienced by the researcher is the issue of time; the research will simultaneously engage in departmental activities like seminars and attendance to lectures. But the researcher was able to meet up with the deadline for the submission of the project.

FINANCIAL CONSTRAINTS: Every research work needs funding; however lack of adequate funds might affect the speed of the researcher in getting materials for completion of the project

1.9 DEFINITION OF TERMS

INTERNAL MARKETING: Internal marketing is the promotion of a company's objectives, products and services to employees within the organization. The purpose is to increase employee engagement with the company's goals and fostering brand advocacy.

CUSTOMER SATISFACTION: Customer satisfaction is defined as a measurement that determines how happy customers are with a company's products, services, and capabilities. Customer satisfaction information, including surveys and ratings, can help a company determine how to best improve or changes its products and services

PRODUCTS: a product is an object or system made available for consumer use; it is anything that can be offered to a market to satisfy the desire or need of a customer.

SERVICES: Services are the non-physical, intangible parts of our economy, as opposed to goods, which we can touch or handle. Services, such as banking, education, medical treatment, and transportation make up the majority of the economies of the rich nations. They also represent most of the emerging nations' economies