Chapter 7 – Service Culture and Internal Marketing

What is the difference between a product company and a service company when it comes to the role of the marketing department in the total marketing process?
– In a service firm a large part of the marketing process is carried out by “Part – time – marketers” outside the marketing department

– In a Product company the marketing department plays a big role in the total marketing process

Why can the introduction of a marketing department to a service firm even be a bad thing?
– Because people on other departments, stop worrying about their customer related responsibilities and concentrate on handling what they see as their “real” job.
What does it mean to be a part time marketer compared to a full time marketer?
Part time Marketer means:
1. Dual Responsibilites
2. Importance of measurement and reward system (reward the right things!)
What is important when thinking about full time marketers = marketing departments and benefits of it?
– Marketing department should not be introduced as the ultimate solution to problems where a market orientation is lacking or insufficient

– Marketing department may be helpful for planning, market research and executing corporate campaigns

– The department should be introduced carefully so no one misunderstands its role. And it shouldn’t have a dominant position within the firm.

What is the difference between the old organizational structure and a service oriented organizational structure?
– The organizational hierarchy or pyramid of a service oriented firm should have as few layers as possible between the customers and top management

– In the new service oriented structure, the management should not be directly involved in operational decision making on an everyday level, but rather be a strategic support.

– The new thinking means that the organizational pyramid has to be flattened and inversed, this follows from the transition of responsibilities and authority to service encounters (decentralization of decisions)

Why internal marketing ? (Idea behind it)
Internal marketing starts from the concept that employees are a first, internal market for the organization. If goods, services, planned marketing communication, new technologies and so forth cannot be marketed to this internal target group, marketing to ultimate, external customers cannot be expected to be successful either

– If top management does not understand the strategic role of internal marketing, money invested in internal marketing efforts and processes will not pay off.

What is internal marketing?
– Internal marketing is a management strategy, that builds good relationships with people in an organization so that a service oriented and customer focused mindset, skills, supportive systems and leadership is created
What are the tasks of internal marketing?
1. making sure everyone In the organization understands and experiences the business in a way that supports customer orientation.

2. Ensure that all employees are prepared and motivated to act in a service oriented manner

How is internal marketing conducted (geführt)?
1. Attitude Management
Attitudes of employees and their motivation for customer consciousness and service mindedness has to be managed.

2. Communications management
Managers, supervisors, contact people and support staff need information to be able to perform their tasks as leaders and managers and as service providers to internal and external customers. They need informations

What is important when doing internal marketing?
– Internal marketing should be an ongoing process and not just a campaign or a series of campaigns.
Which aspects should be considered in internal marketing?
– Create an internal environment that motivates people to be part time marketers

– Become an attractive employer to attract best talents
– Provide employees enough resources, support and freedom to do their responsibilities as part time marketers

What does empowering employees mean and what are the objectives of it?
– Means to give authority to make decisions and take action to the employees

– Goal is to improve the part time marketing performance of the customer contact and support employees. And to make them more satisfied.

What do you have to consider when empowering employees?
– – Empowerment demands a continuous nurturing of trusting relationships between management and employees. Managers must show that they respect employees authority to analyse situations and make decisions.

– setting limits to the power

How are “empowering employees” and “enabling employees” connected?
– The enabling concept is part of the process of creating the conditions required for empowerment

– Empowerment cannot function without simultaneously enabling employees so that they are prepared to take the responsibility that goes with the new authority.

What does enabling employees include?
1. Management support, so that supervisors and managers give information and also take over decision making when needed but do not interfere unnecessarily with the decision making authority given to employees
2. Knowledge support, so that employees have the skills and knowledge to analyse situations and make proper decisions
3. Technical support, from support staff, systems, technology and databases that provide contact employees with information and other services and tools required for handling situations.
What are the benefits of empowerment of service employees?
1. Quicker and more direct response to customer needs in the service process
2. Quicker and more direct response to dissatisfied customers in service recovery situations
3. Employees are more satisfied with their job and feel better about themselves
4. Employees will treat customers more enthusiastically
5. Empowered employees can be a valuable source of new ideas
6. Empowered employees are instrumental in creating good word-of-mouth referrals and increasing customer retention.
What is important for a customer oriented service delivery?
1. Hire the right people
2. Retain the best people
3. Develop people to deliver service quality
4. Provide needed support systems
What is a corporate culture?
– Culture is an overall concept that explains why people do certain things, think in common ways and appreciate similar goals, routines and so forth.

– Corporate Culture can be defined as the pattern of shared values and beliefs that give the members of an organization meaning, and provide them with the rules for behavior in organization.

Why is a strong culture important for service firms?
– A strong culture enables people to act in a certain manner and to respond to various actions in a consistent way. When employees identify with the values of an organization, they are less inclined to quite, and customers seen to be more satisfied the service provided.
– Strong culture is especially important in service organizations, because the attitude and performance of the employees is so visible to customers.
What is a service culture?
– “A culture where an appreciation for good service exists, and where giving good service to internal as well as ultimate, external customers is considered by everyone a natural way of life and one of the most important values”
What are things to consider in a service culture?
– Service should be the Raison d’etre for all organizational activities.

– doesn’t mean to not pay attention to other things like costs, but the service oriented value should have a dominating position in the organization.

Why is culture so important in service businesses?
1. The process nature of service “process/functional quality”

2. Role of frontline employees in representing the company

3. difficulties in controlling quality directly

4. the role of part time marketers – everyone is involved

Which things are to consider when building a service Culture?
1. Strategic requirements: Top management commitment; mission and vision, service concepts

2. Organizational requirements: the organization structure; the customer interface; operational systems, routines and work flows
– All aspects of organization design have to be geared to the service process.

3. Management requirements: Service oriented leadership, communication and coaching

4. Knowledge and attitude requirements: Building employee understanding (holistic view), skills and specific communication and service skills

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