Internal marketing: a review and future research agenda

Internal marketing is a method of cultivating high-level employee perfor- mance. However, the concept is marred with confusion due to the wide range of definitions and consequent implementation challenges. We reviewed the literature on internal marketing published between 1980 and 2020, using a theory, context and method framework. We found that scholars have not paid attention to the utilization of an established frame- work for construct operationalization. We advocate for the application of self-determination theory as a framework for operationalizing internal marketing. In addition, based on the identified research gaps, we propose several ideas for future research directions

Asia Pacific Business Review ISSN: (Print) (Online) Journal homepage: https://www.tandfonline.com/loi/fapb20 Internal marketing: a review and future research agenda Fatima Saman Qaisar & Nazlida Muhamad To cite this article: Fatima Saman Qaisar & Nazlida Muhamad (2021): Internal marketing: a review and future research agenda, Asia Pacific Business Review, DOI: 10.1080/13602381.2021.1858590 To link to this article: https://doi.org/10.1080/13602381.2021.1858590 Published online: 15 Jan 2021 Submit your article to this journal View related articles View Crossmark data Full Terms & Conditions of access and use can be found at https://www.tandfonline.com/action/journalInformation?journalCode=fapb20 ASIA PACIFIC BUSINESS REVIEW https://doi.org/10.1080/13602381.2021.1858590 Internal marketing: a review and future research agenda Fatima Saman Qaisar and Nazlida Muhamad School of Business and Economics, University Brunei Darussalam, Gadong, Brunei Darussalam ABSTRACT ARTICLE HISTORY Internal marketing is a method of cultivating high-level employee performance However, the concept is marred with confusion due to the wide range of definitions and consequent implementation challenges We reviewed the literature on internal marketing published between 1980 and 2020, using a theory, context and method framework We found that scholars have not paid attention to the utilization of an established framework for construct operationalization We advocate for the application of self-determination theory as a framework for operationalizing internal marketing In addition, based on the identified research gaps, we propose several ideas for future research directions Received April 2020 Accepted 25 November 2020 KEYWORDS Internal market; internal marketing; relationship marketing; market orientation Introduction Organizations today face intense competition due to the volatile and dynamic nature of the business environment, which is driven by a technology revolution, globalization, market deregulation, the changing needs of customers and investors, changing career dynamics, and new employee expectations (Becker and Gerhart 1996; Muthuveloo, Shanmugam, and Teoh 2017) Achieving and maintaining competitive positioning and sustainability has become a challenge for managers, forcing them to seek strategies that emphasize performance for survival Much of the literature on organizational performance and competitive advantage has adopted an external focus on customers and competitors (increasing customer base, market share, and sales and profitability) Though this external focus is essential, internal attention is equally required to meet the challenges of competition Ignoring the contributions of internal human resources to organizational outcomes cannot drive competitive advantage in the modern market Employees are responsible for the production and delivery of goods and services; therefore, organizations must incorporate both internally and externally focused marketing to ensure an effective response to their competition The term that describes this internal focus is ‘internal marketing’ The notion of internal marketing, though introduced in the late 1970s, gained prominence in the 1990s (Berry 1995; George 1990; Grönroos 1995; Gummesson 1987; Varey 1995) It is a blend of marketing philosophy and human resource management practices, intended to enhance external marketplace performance (Paul and Sahadev 2018) It parallels an organization’s external marketing programme, which targets the external marketplace of customers and competitors (Rodrigues and Pinho 2012) Piercy and Morgan (1990, 1991) suggest that marketing mix elements of product, price, communication, and distribution should be used to develop CONTACT Fatima Saman Qaisar 18h8702@ubd.edu.bn © 2021 Informa UK Limited, trading as Taylor & Francis Group F S QAISAR AND N MUHAMAD appropriate internal marketing programmes, directed to segments of the internal marketplace with their varying needs and characteristics This targeted internal marketing, in turn, affects employee outcomes, leaving employees better prepared to respond to and deliver on the external marketing programmes (Ferdous, Herington, and Merrilees 2013) Ballantyne (2000, 2003) provides another perspective for adopting internal marketing principles: an inward approach to relationship marketing methods This reflects the relationship development process based on value exchanges between internal suppliers and internal customers The internal network of relationships improves the cross-functional flow of information that creates learning, thereby generating knowledge that is critical for improving external market performance Internal marketing adopts methods and principles of marketing to develop a customerorientation among employees, which is an important condition for ensuring the success of external marketing approaches (Bell, Mengỹỗ, and Stefani 2004; Ferdous, Herington, and Merrilees 2013; Piercy and Morgan 1991) An organization’s dedication to satisfying its employees’ needs provides value to the firm-employee relationship (Papasolomou 2006) This is characterized by conditions of interdependency, support, and reciprocity between the organization and its employees The creation of harmonious exchanges between the two parties motivates the employees to reciprocate with positive attitudes and behaviours These rewards support the organization’s marketing objectives and strengthen its competitive position in the external market (Ahmed, Rafiq, and Saad 2003; Lings and Greenley 2009) For instance, internal marketing practices have been found to enhance job satisfaction and performance (Huang and Rundle-Thiele 2014), positively influence employees’ happiness at work (Tang et al 2020), and ensure a more effective approach to handling customers, which, in turn, induces positive word of mouth, repeat purchase behaviour, and long-term relationships with customers (Park and Tran 2018) Thus, internal marketing practices can yield significant benefits for the organization by enhancing employees’ organizational commitment (Awwad and Agti 2011; Bailey, Albassami, and Al-Meshal 2016; Narteh and Odoom 2015), customer-orientated behaviour (Nart et al 2019), and job performance (Ieong and Lam 2015), which together ultimately improve organizational performance (Kanyurhi and Akonkwa 2016; Shiu and Yu 2010) Despite more than four decades of discussion of internal marketing, its application in organizations remains limited This is perhaps due to its diverse conceptualizations, which has resulted in operationalization issues, due to a lack of clarity on its functionality (Gounaris 2006) These varied interpretations have meant a diverse range of activities being grouped together as internal marketing practices (Rafiq and Ahmed 2000), creating confusion and leading to measurement issues (Lings 2004) Another challenge is that while internal marketing may seem to be a simple concept, it is unusually slippery when it comes to implementation It is socially constructed, meaning the socio-cultural context in which employees and management are operating is important Successful implementation of internal marketing is contingent upon its participants and their understanding, interpretations, and orientations Internal marketing, as a holistic concept, calls for integration and coordination of functions, which requires unified organizational effort, guided by understanding and appreciation of the objectives of internal marketing These challenges call for a review of the existing literature on internal marketing The aim of this review article is two-fold First, it re-visits the concept of internal marketing to analyse and synthesize the literature on the relevant conceptual developments and application It examines the theoretical frameworks that have been previously applied to this topic, the ASIA PACIFIC BUSINESS REVIEW methodologies used, and the variables of interest, with a focus on research from the Asian region Second, this article identifies the limitations of the previous studies and proposes directions for future research This study is structured as follows The following section discusses the methodology chosen for the paper Section three presents the synthesis of the conceptual development of internal marketing and its underlying theories and frameworks Section four describes the outcomes of internal marketing Section five discusses the research gaps identified from the findings of the review, section six outlines future research directions, and section seven presents theoretical and practical implications Finally, section eight presents the concluding remarks Method There are several types of systematic review paper There is the structured review, which focuses on widely used methods, theories, and constructs (Canabal and White 2008; Kahiya 2018; Rosado-Serrano, Paul, and Dikova 2018); framework-based reviews (Paul and Benito 2018); the hybrid-narrative form, with a framework for setting a future research agenda (Kumar, Paul, and Unnithan 2019; Paul, Parthasarathy, and Gupta 2017); theory-based reviews (Gilal et al 2020a, 2019b; Paul and Rosado-Serrano 2019); meta-analyses (Knoll and Matthes 2017); bibliometric reviews (Randhawa, Wilden, and Hohberger 2016); and reviews for model or framework development (Paul 2019; Paul and Mas 2019) Following a brief consideration of the various styles of systematic review paper, a structured review style was chosen for this paper to highlight issues in the conceptualization of internal marketing and to synthesize its theoretical, contextual, and methodological utilization A structured literature review aligns with the objectives and aims of this study A structured literature review maintains a tight focus on the subject area and supports more rigorous thought processes It offers a strategy for dealing with fragmented ontological and epistemological diversity (Armitage and Keeble-Ramsay 2009; Hart 1998) A well-crafted structured review synthesizes and conveys the collective wisdom from the existing body of research It enhances scholars’ understanding of the topic; helps to illuminate gaps in the knowledge of methods, theories, and constructs; and signals future research avenues (Paul and Criado 2020) The authors conducted a thorough systematic search for theoretical and empirical research papers, using numerous electronic databases, including Science Direct, Emerald Insight, Jstor, Wiley-Blackwell, Springer, and Taylor & Francis, as well as an article reference list to identify relevant publications This strategy of using multiple sources ensured that all important and relevant studies were included in the review The keywords used were internal marketing, internal market, internal market orientation, and internal relationship marketing The studies that mention any of these keywords in their titles, abstracts, or author-specified keywords were reviewed The search was restricted to academic articles from journals registered in the business and management discipline Book chapters and research reports were not considered The review focused on articles published in well-recognized journals between 1980 and 2020 This timeframe was chosen because internal marketing was introduced in 1976 and research on the topic – especially theoretical research – saw rapid growth from the beginning of the 1980s The search yielded more than 200 relevant articles Articles F S QAISAR AND N MUHAMAD published in languages other than English were removed from this initial list The selection criteria were then refined to limit the review to journals with a B, A, or A* ranking from the Australian Business Deans Council (ABDC) Studies that mentioned internal marketing as a tool but did not claim to have used it in the study were also removed from the final list We retained highly cited publications conducted from the theoretical perspective of internal marketing Ultimately, our search yielded a total of 85 articles from 39 journals (see Table 1) The sample consists of two types of research paper: non-empirical (25 studies) and empirical (60 studies) Figure shows the historical trend among articles published from 1981 to 2020 In the 1980s, the studies primarily adopted a theoretical approach, and empirical research saw rapid growth only during the latter half of the 1990s A stronger emphasis on empirical research was seen in the last two decades (2000–2020), with a focus on the Asian region (see Figure 2) The empirical research conducted in the last two decades provides an overview of the most recent applications of internal marketing, including the contexts and methods Our literature search was primarily intended to locate studies on the Table List of journals included in the sample Journal Name International Journal of Bank Marketing Journal of Services Marketing European Journal of Marketing International Journal of Hospitality Management Journal of Business Research Journal of Marketing Management Health Marketing Quarterly Tourism Management Journal of Strategic Marketing Anatolia: An International Journal of Tourism and Hospitality Research Services Marketing Quarterly The Service Industries Journal Journal of Hospitality, Marketing & Management Journal of Marketing Communications Journal of Air Transport Management Business Research Quarterly International Journal of Retail and Distribution Management International Journal of Contemporary Hospitality Management Journal of Service Management Journal of Business and Industrial Marketing Journal of Consumer Marketing Journal of Marketing Practice: Applied Marketing Science European Management Journal Journal of Retailing and Consumer Services Journal of Academy of Marketing Science Academy of Marketing Science Journal of Business Logistics Journal of Public Affairs Psychology & Marketing Journal of Financial Services Marketing Journal of Non-Profit & Public Sector Marketing Journal of Relationship Marketing Asia Pacific Business Review Journal of Global Scholars of Marketing Science: Bridging Asia and the world Human Resource Management Journal Journal of Vacation Marketing Journal of human resources in hospitality and tourism Marketing Intelligence and Planning Human Resource Management Total No of Articles 10 5 3 2 2 2 1 1 1 1 1 1 1 1 1 1 1 85 ASIA PACIFIC BUSINESS REVIEW Distribution of publication (1981 – 2020) No of Articles - Non-empirical No of Article - Empirical 1981 1984 1987 1990 1993 1996 1999 2002 2005 2008 2011 2014 2017 2020 Figure Distribution of sample studies from 1981–2020 Coverage of Research Region (1987 -2020) 25 20 15 10 Figure Coverage of research region for empirical studies from 1987–2020 conceptual development of internal marketing and to identify possible areas for future research that have either not been addressed or received only limited attention from scholars Conceptualization and theoretical models 3.1 Conceptual definitions and synthesis Numerous definitions of internal marketing have been proposed since the inception of this concept 30 years ago (Berry, Hensel, and Burke 1976) The concept is typically defined in terms of organizational outcomes It has evolved from a purely managerial perspective on satisfying the needs of customer-contact employees for external customer satisfaction (Berry 1987; Berry, Hensel, and Burke 1976), to incorporate the management of the service value chain and the motivation of customer consciousness and sales mindedness (George 1990; Grönroos 1990; Gummesson 1987), ultimately becoming a complex and holistic concept of developing customer priority throughout the organization to manage change (Ahmed & Rafiq, 2003; Varey 2000) (see Table 2) Table Theoretical research on internal marketing (George 2015) – (original work published in 1984) MacStravic (1985) Berg (1986) Jones (1986) Flipo (1986) Tansuhaj, Randall, and Mccullough (1988) George (1990) Piercy and Morgan (1990) 10 Grönroos (1990) 11 Rafiq and Ahmed (1993) 12 Greene, Walls, and Schrest (1994) 13 Hales (1994) 14 15 Piercy (1995) Cahill (1995) 16 Grönroos (1995) 17 Varey (1995) Key Findings Service firms should use marketing research to understand internal customers’ needs better, modify and improve job-products, segment employee markets, using advertising and personal selling to attract employment candidates Internal marketing focuses on the exchange process between the organization and its employee publics – employment opportunities as products and employees as customers Internal marketing is a systematic approach to achieve a positive relationship with employees that will contribute to the external marketing objectives as well as quality, productivity and efficiency Internal marketing is a shift in management focus from the management of human resource to the management of symbolic resources Internal marketing could help management to create and manage unifying symbols that give meaning to the organization members and impel them to take action according to the overall strategy of the company Internal marketing facilitates interaction and collaboration between different functions for total service delivery system Internal marketing exists at the strategic as well as tactical level Internal marketing is for customer-contact personal The marketing function has to deal at the same time with internal and external markets, and success in the latter is highly dependent on success in the former Internal marketing is oriented to employee development through recruitment, training, communication, motivation and retention to inculcate positive employee attitudes and behaviours such as job satisfaction, commitment, involvement and work motivation Internal marketing is a mechanism for developing and maintaining service-minded and customer-conscious employees Internal marketing programmes alone are not sufficient in developing service culture and need a continued partnership with organizational behaviour such as organizations personality, structure, leadership etc Internal marketplace should be segmented into different groups with different needs and characteristics, and the internal marketing programme developed around these segments Internal Marketing a pre-requisite for successful external marketing Its purpose is to motivate and retain customer-conscious employees Internal marketing is a means to develop and maintain service culture Internal Marketing is implemented through the application of marketing techniques, along with human resource management practices to facilitate the implementation of the company’s market objectives Internal marketing must originate at the top and communicate down to the very bottom of the firm Internal marketing results in satisfaction and motivation of employees to improve service performance The conceptual basis of Internal marketing is riven with contradictions and problems Its individualistic approach to managing human resources clashes with its emphasis on teamwork and commitment Internal Marketing helps to remove internal barriers such as politics, corporate culture, credibility, cost barrier for customer satisfaction Internal marketing is a good human resource management to satisfy external customers Learning organization is a necessary step in the correct performance of internal marketing Internal marketing is a thorough and ongoing internal marketing process that requires cooperation between marketing, operations and human resource functions Internal Marketing is a process of ‘selling’ the concept of customer service to employees Internal Marketing is for customer orientation and quality culture (Continued) F S QAISAR AND N MUHAMAD Sr No Study Berry (1981 1987) Table (Continued) Sr No Study Mitchell and Taylor (1997) 19 Varey and Lewis (1999) 20 Rafiq and Ahmed (2000) 21 Ahmed & Rafiq (2003) 22 Ballantyne (2003) 23 Lings (2004) 24 Ferdous, Herington, and Merrilees (2013) Boukis (2019) 25 Internal marketing can be used for a successful volunteer programme within the non-profit sector through allowing self-expression, developing skills and abilities through training, providing challenge and recognition, role clarity and autonomy and two-way feedback system Internal marketing must apply marketing principles within the total corporation as a social system which operates as a free market’ Internal marketing focus on social values provides for a richer range of exchanges, both economic and non-economic values Internal marketing is a planned effort to achieve customer satisfaction through motivated and customer-oriented employees using marketing like approach Internal marketing creates an environment in which quality enhancing behaviours become a reflexive part of employee action Internal marketing is used to manage internal relationships and generates commitment and involvement in organizational performance Internal marketing requires a process of learning activity for knowledge renewal to achieve market orientation and market-based performance Internal market orientation has a direct positive impact on the internal aspects of organizational performance – employee satisfaction, retention and commitment and these internal aspects, in turn, affect external market orientation and external performance that is customer satisfaction, retention and profit Firms having higher levels of Internal market orientation are likely to develop internal marketing programs that are relationship-oriented Internal market orientation (IMO) is a value creation mechanism for the firm’s internal market Organizations develop superior reciprocal value propositions for employees through internal market orientation ASIA PACIFIC BUSINESS REVIEW 18 Key Findings F S QAISAR AND N MUHAMAD The most popular definition of internal marketing originates in the managerial viewpoint originally presented by Berry (1981) Adopting the behavioural approach, Berry (1981) defines internal marketing as the idea of jobs as internal products offered to internal customers (employees), who deliver product and service value and external customer satisfaction However, Grönroos (1981) postulates that internal marketing aims to obtain and retain motivated customer-conscious staff at all organizational levels by improving communication and coordinating tasks between customer service staff and support staff (Grönroos 1981) In line with Grönroos (1981), George (1990) suggests that internal marketing is a philosophy that considers employees to be a group of internal stakeholders, whose needs must be met so that they can meet the needs of the external customers Piercy and Morgan (1991) recommend that internal marketing strategies use external marketing techniques (4Ps) to handle problems and opportunities within the organization Gummesson (1987) introduced the term ‘internal customer’ He defines internal marketing as a process for integrating all employees and functions into a customer-supplier relationship as part of the service value chain This internal network of customers and suppliers creates interdependence between individuals, serving external customers and improving service quality and customer satisfaction Based on the mechanistic approach of Gummesson (1987), Ballantyne (2003) defines internal marketing as a method of channelling staff commitment and teamwork to enhance external marketplace performance In a similar vein, albeit in the context of the service value chain, Roberts-Lombard (2010) argues that the purpose of internal marketing is to motivate, retain, and attract employees to serve business objectives This is achieved by understanding employees’ emotional and intellectual needs, providing customized products and services, and focusing on the building of long-term relationships (Roberts-Lombard 2010) The essence of the above definitions is that internal marketing recognizes employees as the first market of the organization, and managers must first identify and tend to their needs Since employees are the crucial part of the equation of organizational success, firms should work hard to provide a work environment that motivates, satisfies, and retains the best people (Ahmed & Rafiq, 2003; Vasconcelos 2008) It emphasizes the importance of treating employees as customers and their jobs as products As they with external customers, organizations should determine the needs of their internal customers and design jobs that meet those needs Internal marketing practices signal that the company values its employees, thereby encouraging the growth of trust and commitment to the organization (Abzari, Ghorbani, and Madani 2014; Ahmed & Rafiq, 2003) and a motivated and satisfied workforce (Ahmed, Rafiq, and Saad 2003; Gordillo-Benavente, Domínguez-Valdez, and Vega-Sosa 2015; Gummesson 1987; Romani, Grappi, and Bagozzi 2013; Tansuhaj, Randall, and Mccullough 1988) Rafiq and Ahmed (2000) take a holistic view of internal marketing, proposing interdepartmental integration that improves a company’s coordination, overcomes resistance to organizational change, and motivates employees to engage in the organizationally desired behaviour They define five essential components of internal marketing: (1) achieving customer satisfaction through (2) effective implementation of customer-orientated strategies by virtue of (3) managing and coordinating cross-functional efforts within a process of (4) motivating and (5) satisfying employees (Ahmed & Rafiq, 2003; Ahmed, Rafiq, and Saad 2003) Varey and Lewis (1999) and Varey (1995) also seem to be aligned with this approach Internal marketing represents the convergence of discrete management technologies, such as human resource development, quality management, strategic management, employee relations, corporate ASIA PACIFIC BUSINESS REVIEW communications, and macro-marketing into a complete system (Varey and Lewis 1999) Gilmore and Carson (1995) state that, ‘internal marketing management could be considered and redefined as a more holistic, systematic, and organisation-wide concept’ (Gilmore and Carson 1995, p 308) Departing from the traditional, firm-driven, internal marketing perspective, Lings (2004) and Gounaris (2006, 2008) propose a value-driven perspective that they term an ‘internal market orientation’ The firm-driven view advocates for marketing approaches in the internal market that motivate employees to align their efforts with the firm’s objectives (Boukis 2019) In contrast, an internal marketing orientation enhances and sustains the value created for internal stakeholders It consists of managerial behaviours by which the firm identifies employees’ needs, generates value for them, and ensures that employees’ competences and performance remain aligned with the company’s marketing objectives (Boukis and Gounaris 2014; Boukis et al 2015) 3.2 Theories and models of internal marketing Theories utilized in the field of internal marketing include the marketing mix model, relationship marketing, social exchange theory, transaction cost theory, service profit chain, and the resource-based view 3.2.1 Internal marketing mix model The traditional marketing mix (4Ps) is the most commonly used approach that emerged from early discussions of the concept of internal marketing (Grönroos 1981) It often appeals to managers due their familiarity with the marketing mix concepts of product, price, place, and promotion The 4Ps promotes the notion of ‘selling the job’ to employees via internally directed elements of external marketing programmes to elicit the desired behaviour Using this approach, internal marketers regard their employment opportunities as their principal products and their employees as their most important customers Managers analyse the wants and needs of their internal customers and tailor a marketing mix to suit their employees’ skills, expertise, and experience A primary concern when adopting the internal marketing mix model is that employees cannot be treated as a customer in the same way that an external customer can The power dynamics between an organization and its employees differ from those that arise between an organization and its customers Organizations have coercive power over their employees that they not have over their customers, and so employees may derive negative utility from unwanted work Second, treating employees as customers may dilute the organization’s focus on its external markets Ahmed and Rafiq (2003) suggest that internal marketing should be secondary to a commitment to the external market – namely, customers and competitors (Ahmed & Rafiq, 2003; Bell 1998; Roy et al 1995; Varey and Lewis 1999) However, we suggest that organizations must determine a balance between their commitments to the external marketplace and the internal market, as the development of meaningful relationships with external customers will prove difficult without committing to the development of similar relationships within the organization There are four components of the internal marketing mix Internal product refers to the job itself or its characteristics that are provided to the internal customers (employees) to satisfy their needs The job plays a vital role in the exchange process between the 20 F S QAISAR AND N MUHAMAD Table Coverage of Research Regions/countries in Empirical Studies during 1987–2020 Region East Asia South-East Asia West Asia South Asia Unknown Asia (Total) Europe North America Australia Africa South America Multi-continental/region Total Countries Taiwan, Hong Kong, China, South Korea Malaysia, Thailand, Vietnam, Turkey, Jordan, Saudi Arabia India, Bangladesh UK, Malta, Germany, Greece, Spain, France, Sweden USA, Canada Australia Ghana, Egypt, DR-Congo Brazil Europe, USA, Canada & New Zealand/Singapore & Taiwan Frequency 21 21 60 Percentage 35 35 13.33 6.66 1.66 3.33 100 Table Industry Context of the Study from 1987–2020 Sector Services Industry Finance Hospitality Healthcare Retail Travel Insurance Inter-sectoral Professional Services Education Sports Logistics Call Centre NPO Service – Total Manufacturing Manufacturing – Total Cross-sectoral Total Telecom Iron foundry Services & Manufacturing Frequency 18 10 5 3 1 1 1 53 1 60 Percentage 30.00 16.67 8.33 8.33 6.67 5.00 5.00 1.67 1.67 1.67 1.67 1.67 1.67 90.00 1.67 1.67 3.33 6.67 100 Table Methods used by Internal Marketing Studies (1981–2020) Research Methodology Quantitative Qualitative Mix-Methodology Theoretical & Conceptual Total Techniques Used Survey, Descriptive statistics, Correlations, Structural equation modelling, Linear regression, Multiple regression, Hierarchical regression, OLS regression, Moderated regression analysis, Factor analysis, Mann-Whitney U test, t-test, Chi-square test, Sobel test, Cluster analysis, ANOVA, Hierarchical linear modelling, Multi-sample analysis, Hayes’s bootstrapping process Single case study, Multiple case study, In-depth interviews, Semi-structured interviews, Grounded theory, Thematic analysis, Template analysis, Content analysis, Action research Triangulation approach, In-depth interviews, content analysis, Survey, Descriptive statistics Normative, Review, Model development N 46 13 25 85 Going forward: future research Agenda This literature review explores the concept of internal marketing, its evolution and underlying theoretical explanations in the extant literature, and the outcomes achieved ASIA PACIFIC BUSINESS REVIEW 21 Though the concept was introduced four decades ago, many areas remain unexplored This review employed the ‘theory, context, and method’ framework (TCM) to develop recommendations for future research (see Figure 4) 6.1 Future directions – theory Every marketing activity, if carried out with care and caution, will produce positive results Just as external marketing is concerned with identifying consumer needs and preferences and designing products or services to exploit those needs, the same is true for internal marketing However, the diversity of conceptual meanings of internal marketing have resulted in a myriad of activities as dimensions of internal marketing practices (Rafiq and Ahmed 2000), creating confusion and measurement issues (Lings 2004) Thus, the operationalization of internal marketing remains abstruse Researchers and practitioners face challenges to studying and applying internal marketing due to the lack of application of any established behavioural model to operationalize it The objective of internal marketing is to satisfy employee needs to ensure long-term relationships and improved performance However, the literature is scant on the mechanisms and frameworks for identifying employee needs to develop internal marketing practices This provides an opportunity for further research on improving the internal marketing mix To build knowledge about what internal marketing entails and how it creates value for employees, we recommend following an established model, such as selfdetermination theory (SDT) Adopting an established framework for employee-needs analysis would help with the crafting of a more comprehensive internal marketing programme Figure Internal marketing research spiral 22 F S QAISAR AND N MUHAMAD Self-determination theory (SDT), originally developed by Deci and Ryan (1985), is an empirically based macro theory of human motivation, development, and well-being It classifies motivation into two types: autonomous and controlled Autonomous motivation consists of intrinsic motivation and a type of extrinsic motivation in which people recognize and identify with the value of the activity, integrating it into their sense of self (Gilal et al 2019a, 2019b) Controlled motivation, in contrast, consists of external regulation and introjected motivation It reflects external pressures, such as rewards and threats Introjected motivation involves internal pressures concerned with approval, image management, and self-esteem maintenance (Deci, Olafsen, and Ryan 2017; Rigby and Ryan 2018) Self-determination theory (SDT) suggests that when individuals are autonomously motivated, they enjoy greater psychological health and more effective performance, as they engage in activities with a sense of willingness, volition, and choice (Deci and Ryan 1985, 2008; Rigby and Ryan 2018) For example, in a study of 206 volunteers from four Belgian non-profit organizations (NPOs), Bidee et al (2013) found that autonomous motivation was positively correlated with work effort (Bidee et al 2013) This high quality (autonomous) motivator affects employees’ job satisfaction, leaving them more trusting of the organization and displaying more positive work-related attitudes and behaviours (Gagné and Deci 2005) Hence, for managers to motivate employees to achieve their full potential and engage in the desired prosocial or extra-role citizenship behaviours, they must develop an internal marketing programme that enhances employees’ autonomous motivation Proposition 1: An internal marketing programme developed under the framework of selfdetermination theory (SDT) to enhance autonomous motivation will more accurately determine favourable behavioural outcomes For organizations to build long-term relationships with their employees, they must move beyond satisfying only the tangible needs Satisfying employees is not simply a matter of providing high salaries (though this is important) The stressful and competitive work environment has led to employee demands for more holistic cultures (Grant, O’Neil, and Stephens 2004) that attend to both their tangible and non-tangible needs and interests for their overall well-being (Pawar 2009) Employees not consider work to be a simple exchange process between themselves and the organization (Lings 2004) Employees treat work as a channel, fulfiling themselves through their tasks Humans are meaning-seeking, social animals and their life demands extend beyond the materialistic aspects of their work (Beyer 1999) These employee needs can be addressed through the basic psychological needs theory (BPNT) of SDT This suggests that psychological wellbeing and optimal human functioning are predicted by three universal needs: autonomy, competence, and relatedness The need for autonomy is related to the experiences of volition and psychological freedom The need for competence is satisfied by experiences of effectiveness, growth, and success The need for relatedness is concerned with experiences of belonging and connection (Gilal et al 2020b; Ryan and Deci 2020) If managers can satisfy employees’ basic psychological needs, this will enhance employees’ well-being and improve their experiences of the firm As a result, employees’ value perceptions will be enhanced, giving rise to favourable behavioural intentions ASIA PACIFIC BUSINESS REVIEW 23 (Boukis 2019) Organizations can facilitate the satisfaction of basic psychological needs with internal marketing programmes that include opportunities for growth and development, achievement, recognition, empowerment, feedback, knowledge and mastery, meaning, and self-fulfilment (Papasolomou-doukakis 2012; Sukati, Abu Bakar, and Rohaizat 2013) An internal marketing programme that satisfies employees’ psychological needs will produce a more motivated, satisfied, and competent workforce, which reciprocates with more productive and prosocial behaviours Based on this discussion, we propose the following: Proposition 2: An internal marketing programme that meets employees’ basic psychological needs for autonomy, competence, and relatedness will improve performance and well-being Another area for future research is leadership Leadership plays an essential part in the achievement of internal marketing objectives To, Martin, and Yu (2015) investigated the impact of management commitment to internal marketing on employee attitudes They found that managers’ attitudes to internal marketing significantly affect employee attitudes Chow, Lai, and Loi (2015) studied the moderating effects of leader-member exchange on internal-market orientation and customer-service behaviour They found that when exchange quality is low, internal-market orientation becomes mandatory and positively influences the customer-service behaviour of travel agents Leadership is a well-researched area in the organizational behaviour context However, its application in relation to internal marketing has received less attention, and there are calls for replication and advancement from different perspectives Therefore, it would be valuable to investigate the role of the leader in the internal service profit chain Such research would provide academicians and practitioners with knowledge about leader behaviours, attitudes, and motivational orientations that could enhance the positive influence of internal marketing on employee, customer, and ultimately organizational outcomes Proposition 3: Leadership characteristics (behaviours, attitudes, and motivational orientations) are important to the success of internal marketing There is a lack of research on the role of organizational characteristics in internal marketing Kadic-Maglajlic, Boso, and Micevski (2018) found that cross-functional connectivity moderates the relationship between internal marketing and cross-functional goal compatibility, which leads to customer satisfaction Ng, Fang, and Lien (2016) found that commitment and trust in the management-employee relationship moderates the relationship between internal marketing practices and internal marketing effectiveness Papasolomou and Vrontis (2006a), in their qualitative case study research on banking organizations in the UK, found that mechanistic and bureaucratic organizational structures hinder the application and potential effectiveness of internal marketing practices However, the studies mentioned above cannot be generalized due to their limited samples and exploratory nature; thus, there is a need for further explanatory research in this area Findings on other organizational characteristics – such as organizational climate, culture, strategy, and team dynamics – could offer valuable insights in this area, enabling 24 F S QAISAR AND N MUHAMAD scholars to identify the organizational characteristics that are likely to facilitate the objectives of internal marketing Internal marketing alone is insufficient to bring about the desired change (Papasolomou and Vrontis 2006b) A fundamental rethink of organizational systems and structures can influence the productivity and effectiveness of internal marketing Proposition 4: Organizational characteristics (climate, culture, structure, strategy, and team dynamics) influence the effectiveness of internal marketing 6.2 Future directions – context This section discusses opportunities for future research into industry type and geographical location Since the concept of internal marketing emerged from the services marketing area, most empirical research comes from the services industry The two most common service sectors researched are finance (e.g banks and insurance companies) and hospitality (e.g hotels, casinos, and restaurants) Most of the studied organizations employed the B2C business model Despite the interest of scholars, many service industries remain underexplored, including those associated with information technology, consulting, wellness, and sports Research into manufacturing and the B2B business model is minimal Studies of these two contexts – or cross-sectoral studies – will provide valuable insights into their differences and similarities in terms of implementation and outcomes of internal marketing These gaps lead us to the following proposition: Proposition 5: An investigation of internal marketing across various sectors would highlight the similarities and differences between the implementation and effectiveness of their internal marketing Another contextual setting that could be considered by future studies is geographical location In the reviewed articles, we found that research has primarily been conducted in the Western cultural context, specifically Europe and North America The uniformity of the geographical research context provides the opportunity to study a more varied geographical context Research in Asia is limited to a small number of countries Therefore, we suggest expanding the scope to other Asian countries Replicating studies across different cultures would enable the generalization of findings There is also potential for comparative studies on internal marketing within specific industries in developed and developing countries, enabling scholars to make comparisons and determine the similarities and differences Future research could use cultural frameworks such as Hofstede’s cultural dimensions to investigate differences in internal marketing implementations and outcomes Proposition 6: The implementation of internal marketing programmes and their outcomes will vary across different cultures 6.3 Future directions – method There are four types of study in our sample: quantitative, qualitative, mixed methods, and theoretical or conceptual (see Table 9) The majority are quantitative, using cross-sectional ASIA PACIFIC BUSINESS REVIEW 25 survey methods and non-probability sampling techniques A small number of the studies have qualitative designs and used case study methods (Gummesson 1987; Hales and Mecrate-Butcher 1994; Ozuem, Limb, and Lancaster 2016; Papasolomou and Vrontis 2006a; Paul and Sahadev 2018) and in-depth interviews (Papasolomou-Doukakis and Kitchen 2004; Sargeant and Asif 1998) Qualitative research is suitable for exploratory research as it allows interpretive generalizations (Ozuem, Limb, and Lancaster 2016), rather than causal explanations Future research could apply qualitative methods to explore the relevant dimensions of internal marketing in different cultural contexts It could also help to illuminate the underlying issues of internal marketing, such as challenges of implementation due to organizational dynamics The causes of ineffective internal marketing (such as poor design or mismatches between organizational goals and employee expectations and interests) can be explored through in-depth interviews Future studies should also use mixed methods that involve both qualitative and quantitative approaches, as applying both methods can improve the validity of a study The dynamic nature of internal marketing as a continuous process calls for longitudinal studies Based on the information received, managers may adjust their internal marketing interventions, the causal directions of which can be studied using longitudinal research Proposition 7: Deeper research approaches (e.g qualitative, mixed methods, and longitudinal) will provide more informative, richer, and enhanced understanding of the internal marketing phenomenon, as compared to quantitative causal approaches Implications of the study 7.1 Theoretical implications This paper contributes to research on internal marketing in two ways First, it reveals the current state of the research and highlights the gaps in the literature in terms of conceptualization, context, and methods The first gap pertains to the conceptualization and operationalization of internal marketing, and this calls for a specific theoretical framework to develop internal marketing programmes The second gap is related to the industry and national context of the research Few studies have been conducted in the manufacturing sector, and there is only a small number of cross-sector studies Research in Asia is limited, both in quantity and location, being confined to just 11 countries The replication of studies in various context is necessary for the generalization of findings The third gap concerns the research methods Most studies are quantitative, with a small number employing qualitative methods, thus leaving opportunities for in-depth enquiries into the topic Second, this study puts forward new propositions for future research The basic psychological needs theory (BPNT; autonomy, competence, and relatedness) of SDT proposed in this review is new and could assist scholars to more precisely and systematically operationalize the multi-dimensional concept of internal marketing A more holistic internal marketing programme would create more value for employees, thus enhancing their autonomous motivation Further research could identify the significant drivers for internal marketing outcomes These could be the organization’s leadership (behaviours, attitudes, and motives) or its structure, culture, and environment For example, researchers could investigate whether ethical, spiritual, charismatic, transactional, or 26 F S QAISAR AND N MUHAMAD transformational leadership behaviours tended to influence the effectiveness of internal marketing In addition, future research could investigate the cultural characteristics (power distance, cooperative vs competitive, innovative vs risk-averse, and long-term vs shortterm), type of organization’s structure (mechanistic or organic), and the environment (supportive, fair, etc.), role clarity, and job challenge Study of these characteristics would help to identify the barriers to and facilitators of internal marketing objectives The current review opens up new avenues for scholars to explore context and method and strengthen the arguments for internal marketing There is a need for more qualitative or mixed methods studies in various industry sectors to understand why organizations implement internal marketing and identify the process of implementation for different business models Longitudinal studies could also contribute to a deeper understanding of the purposeful approach to internal marketing 7.2 Practical implications This study corroborates earlier studies that advocate for the implementation and proximal and distal outcomes of internal marketing These outcomes are related to the positive attitudes, motives, and behaviour among employees that result in affective customer responses and improved organizational performance The positive psychological and anthropological outcomes of internal marketing implementation among employees – such as employee engagement, commitment, customer-orientation, job performance, and citizenship behaviour – invite managers to give greater attention to their employees Employees contribute to sustained growth and profitability; therefore, they must be taken care of and valued by their organizations Effectively developed internal marketing programmes help managers to address these objectives Prior studies on internal marketing provide lessons in designing programmes to overcome the challenged faced by managers today Managers are concerned with rising levels of job stress and burnout, low productivity, high turnover, and dissatisfaction with life and work among their workforces Evidence from the literature indicates that employees’ happiness and well-being improves when their needs are understood by their organizations, enabling open and two-way communication Organizations should facilitate a variety of communication channels – not only to communicate their policies to their employees, but also to invite their employees to voice their thoughts and concerns Such communication channels enable the organization to understand its employees’ needs and to efficiently address their issues and concerns (Tang Chang and Cheng 2017) Other internal marketing practices such as growth opportunities, training and development, reward and feedback, and autonomy have also been found to encourage positive attitudes towards the workplace, with employees enjoying higher levels of health and well-being at work (Tang et al 2020) Hence, a carefully planned and tailored internal marketing programme, based on employees’ needs, converts employees into happy, satisfied, motivated, and competent human capital that invests extra effort to help improve and sustain organizational performance (Park and Tran 2018) ASIA PACIFIC BUSINESS REVIEW 27 Conclusion From this literature review, it can be concluded that internal marketing is a potent construct for both micro- and macro-level firm performance Since its inception as a process for the management of front-line employees, it has evolved into an organization-wide phenomenon Our reviewed articles bring to fore several theories that have been proposed as explanations for internal marketing Our review could provide practitioners who intend to embark on this journey with an understanding of internal marketing and its advantages Despite its popularity among scholars, the implementation of internal marketing remains limited A minimal number of research studies have been conducted in the Asian context This is an opportunity for further theory development The literature on this topic is scant, limited to a few specific industries, geographical regions, and methodologies; thus, it would be invaluable to extend the research into other industry contexts and countries It would also be prudent to conduct qualitative and longitudinal studies for further theory-building Disclosure statement No potential conflict of interest was reported by the authors Notes on contributors Fatima Saman Qaisar is pursuing PhD in Management at the University Brunei Darussalam Her research interest is in the areas of organizational behaviour and corporate social responsibility Nazlida Muhamad graduated from the University of Western Australia and has been researching the influence of religion in the marketplace for the last twenty years Currently a Senior Assistant Professor at University Brunei Darussalam and serves on several editorial boards of international journals ORCID Nazlida Muhamad http://orcid.org/0000-0003-2790-8900 References Abzari, M., H Ghorbani, and F A Madani 2014 “The Effect of Internal Marketing on Organizational Commitment from Market-Orientation Viewpoint in Hotel Industry 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doi:10.1108/03090560810903664 Yang, J.-T 2015 “Effect of Internal Marketing on Knowledge Sharing and Organisational Effectiveness in the Hotel Industry.” Total Quality Management and Business Excellence 26 (December2014): 76–92 doi:10.1080/ 14783363.2012.661131 Youndt, M A., and S A Snell 2004 “Human Resource Configurations, Intellectual Capital, and Organizational Performance.” Journal of Managerial Issues 16 (3): 337–360 http://www.jstor.org/ stable/40604485%5Cnhttp://www.jstor.org/page/info/about/policies/terms.jsp ... internal marketing Internal marketing is a thorough and ongoing internal marketing process that requires cooperation between marketing, operations and human resource functions Internal Marketing. .. that internal marketing leads to job satisfaction and affective commitment among managers and market-oriented behaviour among managers and supervisors Internal marketing practices such as internal. .. Korea, and report that internal marketing practices improve desirable employee 16 F S QAISAR AND N MUHAMAD Table Empirical research on internal marketing in Asia Sr No Study Findings Ahmed, Rafiq,