INTERNAL MARKETING AND SERVICE QUALITY IN KASAPA TELECOM- SOLOMON ADU ATEFOE

STUDENT NUMBER: SN- 4970

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INTERNAL MARKETING AND SERVICE QUALITY IN KASAPA TELECOM

SOLOMON ADU ATEFOE

MASTER OF BUSINESS ADMINISTRATION IN STRATEGIC MARKETING

IRISH INTERNATIONAL UNIVERSITY OF EUROPA

SEPTEMBER 2007


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Solomon Adu Atefoe Internal Marketing and

Service Quality in

Kasapa Telecom

MARKETING

MBA Strategic Marketing

IRISH INTERNATIONAL

UNIVERSITY

September 2007


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INTERNAL MARKETING AND SERVICE QUALITY IN KASAPA TELECOM

SOLOMON ADU ATEFOE

A Work Based Project submitted in partial fulfillment of the requirements of

the Irish International University of Europa for the professional degree of

Master of Business Administration in Strategic Marketing

SEPTEMBER 2007


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STATEMENT OF ORIGINAL AUTHORSHIP

Name of Candidate : Solomon Adu Atefoe

Student Number : SN- 4970

Title of Work Based Project : Internal Marketing and Service

Quality in Kasapa Telecom

Degree : MBA Strategic Marketing

I confirm that the materials contained in this Work Based Project are my own

work. Where the works of others have been drawn upon, whether published or

unpublished, due acknowledgements have been given. I also hereby declare that

the materials contained in this Work Based Project have not been published

before or presented for another program or degree in any University.

Signed: Date: 30th September, 2007


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PERMISSION TO USE

In presenting this Work Based Project in partial fulfillment for the requirements of

the Irish International University of Europa for the Master of Business

Administration in Strategic Marketing, I agree that the University Library may

make it freely available at the discretion of the Librarian whether electronically or

manually for inspection. I further agree that permission for copying of this Work

Based Project in any manner, in whole or in part, for scholarly purposes may be

granted by the Irish International University. It is understood that copying or

publication or use of this Work Based Project or part thereof for financial gain

shall not be allowed without my written permission. It is also understood that due

recognition shall be given to me and to the Irish International University in any

scholarly use which may be made of any material in my Work Based Project

Signed: Date: 30th September, 2007


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ABSTRACT

The relevance of internal marketing to service operations rests in the increased

emphasis on service quality in customer oriented organizations. Customers no

longer simply purchase products; they co-produce in service organizations. The

co-production occurs through the front-line employees and the customer at the

time of transaction, therefore, the customer buying experience must be

understood from both the organizational and customer perspective. In service

relationships, where a single employee may be the only point of contact for

customers, monitoring service effectiveness becomes incumbent upon the

employees delivering the service. The purpose of this study is to determine

relationships of employment status and perceptions of internal marketing and

service quality, the relationships between involvement on perceptions of service

quality and feedback, and to how employee perceptions of internal marketing

impact on service quality. This study further seeks to examine the assumption

that internal marketing is important in establishing service quality delivery for

Kasapa Telecom. This research will assist Kasapa Telecom with the identification

of key internal marketing stances, service quality gaps and draw conclusions on

how to increase pace of decision making and reduce customer complaints by

satisfying internal customers which will eventually lead to external customer

satisfaction.

Three distinct groups were examined: 40 Senior Officers which includes heads

of department (Management) 60 employees which represent frontline staff and


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300 customers. The internal management examination participants were

selected via purposive sampling and the frontline staff was randomly selected.

Two instruments were utilized for this study. The management and staff

instrument contained three sections (Internal Marketing, Service Quality, and

Demographics) and the Customer instrument was based on customer

demographics and customer satisfaction stances, services and products offered

by Kasapa. The instruments for all subjects were either personally distributed or

administered as customers visit Kasapa Customer Service Points. It was

established that Management and staff recognizes internal marketing and has

good perceptions on feedback, however staff has a negative perception of

service quality while management has a positive perception. 60% of customers

were satisfied with the time spent at the customer service points and 46% rated

Kasapa’s services as good, however 48% customers disliked Kasapa’s voicemail

service, limited coverage and bad reception. Employee perception of internal

marketing has a positive impact on service quality.


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ACKNOWLEDGEMENTS

I wish to thank my wife Mrs. Naana Adu Atefoe for her time, commitment,

patience and support of which I am appreciative.

I dedicate this work to my two kids, Stephenie Fafa Adu Atefoe and Solomon

Nana Adu Atefoe. They are my inspiration.

In addition, I would like to thank my extended family for all their love and support

they provided me. My mum Mercy, Sister Veronica, Sister-in-law Enyonam for

their immense support.

Finally, I want to thank the managers and employees of Kasapa Telecom, for

their cooperation in the successful completion of my dissertation on internal

marketing and service quality.


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TABLE OF CONTENTS

Title Page……………………………………………………………..... 1

Statement of Original Authorship…………………………………..… 4

Permission to Use……………………………………………………... 5

Abstract ………………………………………………………………… 6

Acknowledgement …………………………………………………….. 8

Table of Contents….…………………………………………………… 9

Chapters:

1. Introduction ………………………………………………………… 13

1.1Background of the Study ……………………………………..….... 14

1.2Background Information on Kasapa Telecom Limited ………..… 15

1.3Statement of the Problem ……………………………………….…. 20

1.4Purpose of the Study/ Research Objectives……………………… 21

1.5Significance of the Study …………………………………………... 22

1.6Research Questions or Hypotheses………………………………. 23

1.7Definitions of terms………………………………………………….. 23

1.8Limitations of the Study……………………………………….…….. 25

1.9Organisation of the Study…………………………………………… 26

2. Review of Literature ……………………… ………………………. 27

2.1 Introduction…………………………………………………………... 27

2.2 Internal Marketing …….. ……………………………………….… 27

2.2.1Creation of Internal Marketing..……..…………………………... 28

2.2.2Origination of Internal Marketing…..……………………………. 31

2.2.3Human Resource Perspective.……………………………….…. 32

2.2.4Internal Customer Orientation ………………………………….. 33

2.2.5Communication through Knowledge Exchange Patterns ….… 34


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2.2.6Feedback …………………………………………………………. 37

2.2.7Implementation through External Marketing Techniques ……. 38

2.2.8Link with External Marketing .…………………………………… 39

2.2.9Employees ………………………………………………………... 41

2.2.10Energizing ……………………………………………………….. 43

2.2.11Code breaking ………………………………………………….. 44

2.2.12Authorizing………………………………………………………. 45

2.2.13Diffusing……………………………………………………….…. 46

2.2.14Limitations ………………………………………………………. 47

2.2.15Implementation ……………………………………………….... 48

2.2.16Consequences …………………………………………………. 50

2.2.17Marketing ……………….………………………………………… 51

2.3 Service Quality …………………………………………………..… 52

2.3.1Customer Expectations …………………………………………. 58

2.3.2Service Encounters ……………………………………………… 60

2.3.3Servicescapes …………………………………………............... 62

2.3.4Service Failure and Recovery ………………………………….. 63

2.3.5Service Quality Importance …………………………............... 65

2.3.62Creation of Service Quality …………………………………….. 68

2.3.7 Outcomes ………………………………………………………. 69

2.3.8Empirically Tested ………………………………………………. 70

3. Methodology …………………..…………………………………….. 73

3.1.1Overview of Research Methodology ……………………............ 73

3.1.2Types of Research …….………………………………………….. 73

3.1.3Subject Selection ………………………………………………….. 76

3.1.4Setting ………………………………………………………………. 76

3.1.5Sampling Method ………………………………………………….. 77

3.1.6Instrumentation ……………..…………………………….............. 80

3.1.7Definition of Terms ………………………………………………… 80


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3.1.8Independent Variables ……………………………………………. 81

3.1.9Dependent Variables ……………………………………………… 83

3.1.10Demographic Variables …………………………………………. 85

3.1.11Scale Instruments ……………………………………………….. 85

3.1.12Scale Development ……………………………………………… 87

3.1.13Data Collection Procedures …………………………….……… 90

3.1.14Approval ………………………………………………………….. 90

3.1.15Implementation ………………………………………………….. 90

3.1.16Data Analysis Procedures ……………………………………… 91

3.1.17Research Question #1 ………………………………………….. 91





3.1.22 Customer Satisfaction Survey………………………………….. 94

4. Findings and Analysis…………………………………….………… 95

4.1.1Reliability ……………………………………….………………..… 95

4.1.2Examination of Respondents…………………………………..… 95

4.1.3Response Rates ………………………………………………….. 95

4.1.4Descriptive Statistics …… ……………………………………….. 97

4.2.1Data Analysis for Research Question 1 ……………………….. 97

4.2.2Data Analysis for Research Question 2 ……………………….. 98

4.2.3Data Analysis for Research Question 3 ………………............. 99

4.2.4Data Analysis for Research Question 4……………………....... 101

4.2.5Data Analysis for Research Question 5 ………………………… 102

4.3Customer Satisfaction Analysis……………………………………… 104

4.3.1 Summary of Customer Satisfaction……………………………… 107

5. Discussion, Conclusion and Recommendations………….…... 109


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5.1Discussion on Findings………................................................ ….. 109

5.2 Implications …………………………….……………………………… 116

5.3Limitations ………………………….….............................................. 117

5.4Conclusions ……………………………….……………………………. 118

5.5Recommendations …………………………………………………….. 120

5.6Future Research …………………………………………………......... 122

5.7References ……………………………………………………………… 123

5.8Appendices:……………………………………………………………… 133

5.8.1. Final Internal Customer Instrument (management & Staff)……. 133

5.8.2. Final Customer Instrument………………………………………… 137

5.8.3. SERVQUAL Diagram ……………………………………………… 139

LIST OF TABLES

Table 3.0- Methods for Implementation of Internal Marketing Concepts… 49

Table 4.1 – Response rates…………………………………………………… 96

Table 4.2 – Cross Tabulation on employee status and internal marketing. 97

Table 4.3 – Chi-Square for research question 1…………………………..… 98

Table 4.4 – Independent Samples T Test on perception of Service Quality. 99

Table 4.5 – Correlations on employee perception ………………………….. 101

Table 4.6 – Independent Samples T Test on perceptions of feedback…… 102

Table 4.7 – Correlation on Internal communication impact ……………. 103

Table 5.0 – Customer Satisfaction ratings of Kasapa Telecom Services…. 104

Table 5.1 – Satisfaction with time spend at Kasapa CSP ratings……..…… 105

Table 5.2 – What customers dislikes about Kasapa…….. …………………. 106

Table 5.3 – Suggestions by customers for improved service quality….…. 107


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CHAPTER 1

INTRODUCTION

The relevance of Internal Marketing to service operations rests in the increased

emphasis on service quality in customer oriented organizations. Customers no

longer simply purchase products; they co-produce in service organizations

(Prahalad & Ramaswamy, 2000). The co-production occurs through the front-line

employees (staff) and the customer at the time of transaction, therefore, the

customer buying experience must be understood from both the organizational

and customer perspective. This places greater emphasis on the process where

each member must feel responsible for the outcome (Manville & Ober, 2003).

Internal marketing is a process that creates an environment where every member

acts as both a client and customer in order to create responsibility. Given the

shift from a manufacturing to a service economy, customer service effectiveness

has gained increased attention over the past several years (Bassi, Benson, &

Cheney, 1996). Customer service effectiveness is important because

organizations that provide good customer service gain a competitive advantage

over organizations that do not. For example, quality of customer service is

related to customer loyalty, customer retention, and increased organizational

profits (Reicheld & Sasser, 1990). In addition, loyal and satisfied customers serve

as an important source of free advertising through referrals and

recommendations, whereas unsatisfied customers are more likely to defect and


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to convey negative experiences to other potential customers (Hartline & Jones,

1996).

1.1Background of the Study

The current study is designed to examine how internal marketing determines the

overall service quality of external customers within all of the hierarchal levels of

an organization. In the study every member of the organization is involved in the

creation of the final service which is important because the difficulties of most

organizations occur internally not externally (Lings, 1999). The ability to improve

the services provided relies on the acceptance and use of the feedback.

The study attempts to blur boundaries between the organization and its

customers and allows the organization to become a sum of it parts. Traditionally,

marketing had been relegated to marketing departments whose sole job was to

satisfy the needs of customers, but many believe this must be the focus of all

organizational members. The inclusion of all members creates internal interaction

and with the goal of enhancing the knowledge of front-line employees and their

involvement with customers (Lings, 1999). The use of this design also allows for

the creation of relationships through every facet. When relationships are

developed, the amount and quality of feedback increases, this identifies

opportunities, wants, threats, and needs. Feedback allows the organization to

generate intelligence about customers, coordinate activities to various groups,

and since interaction is increased, the dissemination of new information is

frequent (Lings, 1999).


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Finally, service quality must be examined within each hierarchical level of the

organization. If all members of the organization are both customers and sellers of

a product then they hold a perception of service quality and this must be

determined. This allows for a greater understanding of where flaws within an

organization may be addressed and fixed when many times external customers

fail to voice their thoughts to the organization (Johnston & Mehra, 2002). The

current study examined this phenomenon within Kasapa Telecom Limited.

1.2 Background Information on Kasapa Telecom Limited

Kasapa Telecom Limited a wholly–owned Ghanaian subsidiary of Hutchison

Telecom International Limited is a key player in the fast growing

telecommunication industry in Ghana. Kasapa Telecom Limited currently has a

staff strength of 215 and has a subscriber base of over 250,000 which increases

on a daily basis.

Kasapa Telecom Limited has gone through varied changes, from being Celltel

Limited in 1995 to re-branding to Kasapa Telecom in January 2003. On the 19th

Day of September 2005 Kasapa switched from AMPS analog to CDMA 2000 1X

digital technology. Kasapa is the only company in Ghana operating with this

technology with other competitors like Areeba, Tigo and Onetouch operating

GSM technology services. Though the industry is dynamic the pace of decision

finalization experienced in Kasapa is slow and customer complaints are high.


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There are constant complaints from employees of not being informed of

company’s programs before it gets to the public domain. Customers’ perception

of service quality is also blurred based on the concentration of handset problems

instead of the main business mission which is to provide telecommunication

services. The increasing customer complaint on handsets problems as well as

staff preparedness to assist customers leaves much to be desired. However

measures are being put in place to curb this situation. A visit to any office of

Kasapa will confirm the varied changes like the branches being refurbished with

new zoning starting with customer activated terminals with appealing physical

ambience. The various products have been well positioned with service roles well

labeled on the hanging signage for customers to be directed. The queue

management system allows egalitarian system of ‘first come first serve’. Frontline

staff serves as quickly as possible with smiles.

Telecommunications, “communicating over a distance”, has actually existed for

thousands of years, from the smoke signals by the Indians, to lighthouses’

communication with ships, to the invention of the telephone by Alexander

Graham Bell is 1887. Telecommunications has been a task of the government

and is usually operated by a ministry or public body to be responsible for

providing telecommunication services to everyone at the same price usually

regardless of where the user resides.


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The telecom industry in Ghana has several operators in many diverse sectors.

The voice sector is characterized by cellular mobile and fixed telephony services.

Telephone users in Ghana may be put into three broad categories or segments.

Those who can:

• Afford services at the current rates and do not complain;

• Barely afford the rates and are cost conscious and regulate their

telephone usage;

• Use the telephone to receive calls and seldom originate to any.

Telephone service providers are increasingly selecting post-paid users because

of the rate of default in bill payment.

Almost all the mobile service providers in Ghana have post-paid products for the

first category. This is more conscious of service availability, service quality and

product enhancements. The second category of users has more recently

resorted to using pre-paid cards for calls. They received their calls on mobile

handsets and make calls at communication centers and at phone booths. They

would like to make more calls but tariffs are too high for them, and sometimes

handset costs constitute a major entry barrier. Again handsets may not be used

to initiate calls for a long time because there may not be easy access to a pre-

paid sales point or an account top-up point. Cards are of fixed values and this

group of users considers the prices high. One feature that motivates a minority of

users to buy and use mobile handsets is the ability to know who is calling before


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answering. The third group of users only receives calls at communication centers

and pays a token for each call received.

The National Communications Authority (NCA) released its statistical analysis of

the telephony distribution of telecommunication companies in Ghana for the first

quarter of 2007. Areeba grew its market share by increasing its number of

subscribers to 2,924,448. This is an increment of 13.11 percent over the

2,585,467 subscribers that were recorded in 2006. According to the analysis

Areeba thus grew faster than all mobile networks except Onetouch which grew

by 19.26 percent to reach 1,046,002 in the first quarter of 2007 from 877,106 in

2006. Tigo had the third highest growth-rate of 10.33 percent to reach 1,438,885

early in 2007 up from 1,304,120 in 2006. Kasapa comes fourth with about 9.21

percent to reach 218,526 as at the first quarter of 2007 from a figure of 200,104

as at December 2006.

During the first quarter of 2007, Areeba was able to reverse the trend that lasted

through most of 2006 when all the other networks were growing faster. It

recorded a percentage growth of 46.22 percent to reach 2,924,448 at the end of

March 2007 compared to 2,000,000 in March 2006. Tigo had 91.85 percent

growth to reach 1,438,885 compared to 750,000 as at March 2006, while

Onetouch had 87.92 percent growth to record 1,046,002 at the end of March

2007 – a great difference from 556,611 in March 2006. Kasapa recorded the


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highest within the period of about 113.6 percent, despite a low figure of 218,526

at the end of March 2007 as compared to 200,104 in the first quarter of 2006.

Areeba has over half the market share with 51.96 percent. It recorded a figure of

2,924,448 as against the total of 5,627,861 mobile phone subscriptions for the

first quarter of 2007. This is followed by Tigo, which had a market share of 25.57

percent, recording 1,438,885 as against a total of 5,627,861. Onetouch recorded

a market growth rate of 18.59 by achieving a subscriber base of 1,046,002 at the

end of March 2007 as against 5,627,861 for all the networks, while Kasapa

pulled a market share of 3.88 percent. This represents a total figure of 218,526

as against the total figure for all the networks.

Fixed lines continued to lose growth. During the first quarter of 2007, only 1,843

new fixed lines were subscribed to, a growth rate of a mere 0.5 percent. Over the

year up to March 2007, 26,339 fixed lines were subscribed to, a growth of 7.84

percent. The total number of fixed lines was 362,220 at the end of the first

quarter of 2007, while in the first quarter of 2006 there were 335,881. A total of

360,377 were recorded at the end of the fourth quarter of 2006. Ghana Telecom

recorded 359,417 at the end of March 2007 and had a market share of 99.23

percent over Westel, which had 0.77 percent representing about 2,803 for the

same period.


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At the end of the first quarter of this year 2007, Ghana achieved a telephone

penetration level of over 27 percent, representing 6,000,906 subscriptions, up

from 25 percent in 2006, representing about 5,338,701 subscriptions. (Business

week P 5 & 9)

The current study allowed for the examination of all departments that while

focused on customer needs never felt a direct impact of positive or negative

service quality, during Kasapa’s 4 years of operations. The revenue was always

guaranteed. This creates an interesting dilemma because strong service quality

is expected but are there any consequences if this fails to happen.

1.3 Statement of the Problem

Service quality is developed through internal marketing which occurs through

external marketing techniques. Constant training occurs between management

and frontline employees and ends with these individuals training the customers.

A continual feedback loop between all the groups exists to create organizational

learning where both employment and product issues may be confronted to

determine threats, wants, and needs since every person is both a supplier and a

customer (Lings, 1999). The interactions internally and externally create

relationships and demonstrate a long-term focus for the organization.

Internal marketing must be started, practiced, and supported by top

management. It continues through middle management to front-line employees,


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and ultimately results in strong service quality (Varey & Lewis, 1999). Top

management must treat middle management as a customer of the product and

determine what middle management perceives as the technical qualities,

functional qualities, and image of the organization. They must create programs to

segment them into various consumer groups in order to determine their wants

and needs, and a similar process must occur throughout the flow chart.

The ability to recognize areas for improvement in service quality and their effects

on profit is difficult. It is believed that companies which focus on quality service

increase their market shares and hold the ability to charge premium prices, when

this is not addressed companies lose revenue, customers, and therefore must

spend in an attempt to regain new clients. The challenge in this area of research

has been the ability to operationalize service quality (Zeithaml et al., 1996).

Service quality develops over numerous transactions not transaction specific,

and it involves beliefs from past experiences (Boulding, Kalra, & Staelin, 1999).

Often a customer forms a dominate belief about one brand in a specific industry

to use as a comparison. Previous research on service quality exists throughout

other industries, but the current study examines internal marketing from internal

customer perspective.

1.4 Purpose of the Study/Research Objectives

The purpose of the study is to determine:


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1) To examine the relationships between employee status (Management and

staff) and perceptions of internal marketing,

2) To examine the impact of internal marketing and service quality on internal

and external customer satisfaction in Kasapa Telecom

3) To establish the impact of internal communication on internal marketing and

service quality in Kasapa Telecom,

4) To assess employee perceptions on internal marketing and service quality

5) To examine how perceptions of feedback differ within management, front-line

employees, and the customers of Kasapa Telecom

1.5 Significance of the Study

The significance of the study is to create a foundation for internal marketing

through the examination of Kasapa Telecommunication Network. In an era where

competition continues to increase and emphasis is placed on specific

organizations to distinguish themselves within their industry, the implementation

of internal marketing creates an advantage that may not be easily duplicated by

competition. It is a method that requires the full support of top management and

must continue throughout the organization. Examination of internal marketing

literature demonstrates few attempts to empirically study the idea. A common,

possibly idealistic, logic exists that internal marketing creates these positive

outcomes. This study attempts to provide a foundation based on marketing not

human resource techniques that may be replicated within other industries.


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Increased customer expectations to service quality delivery, increased

competitions and lots of promotional or product innovations by players in the

telecommunication industry calls for the need to establish what creates customer

retention as that is the key to customized targeting and with Kasapa investing in

product and promotion innovations, a survey of its customer service delivery is

imperative to establish its impact on customers and ultimate competitive

advantage.

This study will form the basis for further research into customer expectations in

various industries as it changes on daily basis, aid universities and researchers

to establish the standards required for service quality delivery. This study will

further establish a blueprint for the government to formulate state policies with

regards to service communication and standards.

1.6 Research Question /Hypothesis of study

The hypothesis whose validity this study will test is that: an increase in

satisfaction levels for employees by internal marketing will translate into higher

perceived service quality and value from external customers which will create

loyalty and positively affect the profitability of the organization.

1.7 Definition of Terms

The following terms are defined to clarify meaning.


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Internal Marketing: – “is attracting, developing, motivating, and retaining

qualified employees through job-products that satisfy their needs. Internal

marketing is the philosophy of treating customers – indeed, “wooing employees

… - and is the strategy of shaping job products to fit human needs”

(Parasuraman et al., 1991, p. 151).

Marketing: – “is an organizational function and a set of processes for creating,

communicating, and delivering value to customers and for managing customer

relationships in ways that benefit the organization and its stakeholders”

(American Marketing Association, 2004).

Perceived Service Quality; – “Customers’ cognitive evaluation of the service

across episodes compared with some explicit or implicit comparison standard”

(Storbacka et al., 1994, p. 25).

Management: - Management consists of full-time members of the organization

who train, provides direction, open lines of communication, and market the

products offered by the organization to front-line employees. Management within

Kasapa Telecom exists within many different hierarchical levels

Staff (Front-line employees:: - The staff consists of Graduate Administrative

Assistants and student employees on national service. Student employees hold

their positions for one year as it is mandatory according to their service

stipulation by the state and could be employed permanently after the service

based on performance


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Services capes: - are “the built environment (i.e., the manmade, physical

surroundings as opposed to the natural or social environment)” (Bitner, 1992, p.

58).

Quality: – “a strategic tool for attaining operational efficiency and improved

business performance” (Jain & Gupta, 2004).

Service Quality: – “a global judgment, or attitude, relating to the superiority of

the service” (Parasuraman et al., 1988).

Relationship Marketing: – “establish, maintain, and enhance relationships with

customers and other partners, at a profit, so that the objectives of the parties

involved are met, this is achieved by mutual exchange and fulfillment of

promises” (Gronroos, 2002, p. 138).

1.8 Limitations of the Study

One limitation is the determination of outcomes for the organizations. Many of the

organizations fail to create a revenue stream and no market share exists within

the industry. Therefore, positive performance may rely on service quality

perceptions and whether the customer is retained on the Kasapa network.

A second limitation from a conceptual standpoint is that regardless of the study

outcomes, organizational management theorists still may believe that internal

marketing is a human resource phenomenon with a marketing twist (Mudie,

2003). The ability to overcome this point of view will hopefully be created

throughout the study.


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A third limitation is how to implement internal marketing with external marketing

techniques. In marketing literature numerous methods exist to sell a product.

While the present study attempts to identify these methods, it is possible the

results may demonstrate that internal marketing exists, but it may not reveal

which marketing techniques are most effective.

The fourth limitation if the fact that this study only covers the internal marketing

and service quality stance at Kasapa Telecom and therefore cannot be

generalized as normal practices in all telecommunication industries in Ghana and

for that matter all other related industries in Ghana.

1.9 Organization of Study

The next chapter presents the review of literature which was divided into two

areas, 1) internal marketing 2) service quality. The third chapter discusses (a)

overview of research methodology, (b) subject selection, (c) instrumentation, (d)

data collection procedures, and (e) data analysis procedures. The fourth chapter

presents the findings and Analysis, and the fifth chapter discusses the summary,

conclusion and recommendations.


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CHAPTER 2

LITERATURE REVIEW

2.1 Introduction

The next chapter presents the review of literature which was divided into two

main areas, 1) internal marketing and 2) service quality. The first section

attempts to describe how internal marketing research has developed and further

to examine the use of external marketing techniques in greater detail. The

second section reviews service quality literature.

2.2 Internal Marketing

Berry(1981) originally defined Internal Marketing as “viewing employees as

internal customers, viewing jobs as internal products that satisfy the needs and

wants of these internal customers while addressing the objectives of the

organization” (p. 25). He posited that employee jobs could be considered the

firm’s products, and developed traditional marketing models and approaches that

were based on the idea of making the worker’s job attractive and desirable to him

or her. He employed a basic 4Ps approach that focused on the employee’s job

as the product and used various forms and formats of price, distribution or place

and promotion to build that desirability. Since this time authors, practitioners, and

researchers in this area have developed different definitions in order to explain

their version of this idea (Ahmed, Rafiq, & Saad, 2002; Ballantyne, 2003; Berry,

1981; Cahill, 1995; Lings & Brooks, 1998; Mudie, 2003; Prasad & Steffes, 2002;

Rafiq & Ahmed, 2000; Varey & Lewis, 1999). The main ideas discussed


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evolved around the affects on employees (Ahmed et al., 2002; Ballantyne,

2003; Berry, 1981; Cahill, 1995; Lings & Brooks, 1998; Mudie, 2003; Prasad &

Steffes, 2002; Rafiq & Ahmed, 2000; Varey & Lewis, 1999), the affects on the

organizations (Ahmed et al., 2002; Ballantyne, Christopher, & Payne, 1995;

Lings, 1999; Mudie, 2003; Varey & Lewis, 1999), external customer

satisfaction (Ahmed & Rafiq, 2003; Cahill, 1995; Prasad & Steffes, 2002; Rafiq

& Ahmed, 2000), and the development of cross functional units within the

organization (Ahmed & Rafiq, 2003; Ballantyne, 2003; Rafiq & Ahmed, 2000).

The most comprehensive method developed to create and cultivate this concept

to date was developed by Ballantyne (2003). The research discovered four

phases to the internal marketing cycle that included energizing, code breaking,

authorizing, and diffusing while each step is accomplished through learning

activities, spontaneous community, and knowledge renewal. Gummensson

(1987) also observed internal marketing as was then understood, is seen to be

entwined with service quality, total quality and cultural issues.

2.2.1 Creation of Internal Marketing

Employees: Employee definitions discuss the need to recruit, train, attract,

motivate, communicate and retain all employees through awareness in order to

meet their wants and needs. One author even stated the need to “woo”

employees (Cahill, 1995). If these are not met then the satisfaction of external

customers is difficult, if they are met then employees become committed, co-

operative, and enthusiastic about the organization.


29

This is accomplished by treating employees as internal customers. This process

involves the use of marketing techniques to sell the product internally and

employees become customers of the organization when they purchase products

or services. This allows them to experience the service firsthand, develop a

perception of service quality, and provide immediate feedback (Ahmed et al.,

2002; Ballantyne, 2003; Berry, 1981; Cahill, 1995; Lings & Brooks, 1998; Mudie,

2003; Prasad & Steffes, 2002; Rafiq & Ahmed, 2000; Varey & Lewis, 1999).

Organization: The organizational approach described the utilization of TQM

techniques and the need to improve satisfaction through organizational actions.

Internal marketing allows the organization to create an identity that stresses

customer focus through relationships developed by changes in attitudes and

procedures in order to develop legitimacy for the company. The ultimate goal for

the organization is to increase external marketplace performance in the long-run

(Ahmed et al., 2002; Ballantyne et al., 1995; Lings, 1999; Mudie, 2003; Varey &

Lewis, 1999).

External customer satisfaction: The ability to increase performance involves

customer satisfaction, and it was described as an outcome of internal marketing

(Ahmed & Rafiq, 2003; Prasad & Steffes, 2002; Rafiq & Ahmed, 2000). The

researchers hypothesize that if internal marketing is effectively implemented, the

employee becomes satisfied, and this positive behavior is transferred to the


30

consumer during interaction to improve the external customers service

experience which results in external customer satisfaction. While ideologically

plausible the relationship between internal and external satisfaction has not been

tested.

Cross-functional units: The development of cross-functional units appears to

be a major reason for internal marketing due to its ability to remove departmental

barriers and allow for better communication. The increase of communication

allows for the creation of a collective unit through individuals that provide a

foundation for knowledge renewal and transfer among organizational members. It

shifts the focus of the employee from a self-centered perspective to a mind set

that strives for the achievement of company goals (Ahmed & Rafiq, 2003;

Ballantyne, 2003; Rafiq & Ahmed, 2000).

The four topic areas provide different approaches to internal marketing. The

literature demonstrates and hypothesizes that an increase in satisfaction levels

for employees will translate into higher perceived quality and value from external

customers which will create loyalty and positively affect the profitability of the

organization (Ahmed et al., 2002, Cahill, 1995, Mudie, 2003). The definition from

Parasuraman, Berry, and Zeithaml (1991, p. 151) was utilized in this study. It

states, “Internal marketing is attracting, developing, motivating, and retaining

qualified employees through job-products that satisfy their needs. Internal

marketing is the philosophy of treating employees – indeed, “wooing employees


31

… - and is the strategy of shaping job products to fit human needs”

(Parasuraman et al., 1991, p. 151).

2.2.2 Origination of Internal Marketing

Berry (1981) first introduced the idea of internal marketing in research completed

on the retail banking industry where he believed that employees, similar to

external customers, sought to have their needs fulfilled. If an organization is able

to satisfy these needs then their members will likely deliver external quality,

which ultimately creates loyalty and satisfaction amongst all stakeholders.

Service industry organizations now recognize the importance of quality and

attempt to exceed the expectations of customers (Ballantyne et al., 1995). While

the level of perception varies from customer to customer, if service quality

provided increases the value for the customer experience, then one method to

obtain this level is through the implementation of an internal marketing program

(Ballantyne et al., 1995). It is believed organizational problems are internal, not

external (Lings, 1999) therefore, implementation of an internal marketing

program will eliminate departmental walls, integrate members organization wide

(Ahmed & Rafiq, 2003; Hogg, Carter, & Dunne, 1998), and this creates the

opportunity to improve quality throughout the organization (Lings & Brooks, 1998;

Prasad & Steffes, 2002).

Issues develop over the legitimacy of internal marketing and the two lines of

research that exist: (1) an internal customer orientation and (2) a human


32

resource perspective (Lings, 2004). Human resource scholars believe internal

marketing is a personnel issue (Ahmed et al., 2002; Wasmer & Bruner II, 1991).

Cahill (1995) and Lings and Brooks (1998) extended this thought and stated

marketers are attempting to create a market-driven organization and fail to

recognize how this affects external customers and these individuals are the true

customers. Marketing scholars simply believe human resource practices treat

employees as pawns, not customers and therefore members create

contradictions between actions and beliefs. The ultimate goal is to shift the

employee perception of working for themselves into a belief of working for the

company (Mudie, 2003).

2.2.3 Human Resource Perspective

The human resource perspective examines the relationship between companies

and employees (Lings, 2004). This line of internal marketing fails to meet the

definition developed by Parasuraman et al., (1991) and a review of past literature

demonstrates strong interest in this line of inquiry. This method stresses the

motivation and satisfaction of employees in order for organizational success to

occur (Lings, 2004). Ideas consist of training, strategic rewards, job designs, and

operational changes are discussed which exist outside of marketing (Ahmed et

al., 2002; Ballantyne et al., 1995; Hogg et al., 1998; Lings, 1999; Parasuraman et

al., 199; Varey & Lewis, 1999).


33

2.2.4 Internal Customer Orientation

Gronroos (1982) in the development of internal marketing stressed the

importance of remaining within marketing type techniques to satisfy needs, or it

was not internal marketing. The internal customer orientation previously

mentioned is a process that attempts to fulfill this goal where every member is

treated both as a customer and supplier to the firm (Lings, 2004). It is

accomplished through the execution of external marketing techniques, where the

focus is on satisfying the product needs of employees (Foreman & Money, 1995).

Internal marketing itself incorporates marketing, management, quality control,

communications, and human resource departments in order to implement the

program (Varey & Lewis, 1999). The incentive for proper implementation of

internal marketing is how it will assist in the creation of a competitive advantage

over the competition. Ballantyne (2003) described this concept as needed by the

“new organization” and many believe that it will create this advantage (Varey &

Lewis, 1999; Lings, 2004). Gronroos (1994, p. 14) stated, “Without active and

continuous internal marketing efforts the interactive marketing impact on

customers will deteriorate, service quality will suffer and customers will defect.”

The challenge for organizations is they implement these techniques but often

abandon the ideas through the inability to recognize immediate results (Crosby &

Johnson, 2003).


34

2.2.5 Communication through Knowledge Exchange Patterns

Internal marketing exists through employees, organizations, external customer

satisfaction, and cross-functional units, which all require communication for

success (Ahmed et al., 2002; Ballantyne, 2003; Berry, 1981; Cahill, 1995; Lings

& Brooks, 1998; Mudie, 2003; Prasad & Steffes, 2002; Rafiq & Ahmed, 2000;

Varey & Lewis, 1999). Organizations must communicate with employees to

ensure wants and needs are met. Employees must communicate with customers

to ensure external customer satisfaction, and the development of cross-functional

units eliminates departmental barriers which promotes communication

throughout the organization. The inclusion of communication from all

organizational members creates involvement and a sense of responsibility (Varey

& Lewis, 1999). Organizational wide communication develops a perception of a

service minded, customer conscious perception internally and externally.

Knowledge must be communicated throughout hierarchical levels, from

customers to top management, throughout departments, and amongst all

employees. Ballantyne (2003) described this as knowledge exchange patterns.

In order to properly implement internal marketing, organizations must understand

their knowledge exchange patterns. Ballantyne (2003, p. 1246, Figure 1.1)

developed three patterns: (1) hierarchical exchanges, (2) inter-functional

exchanges, and (3) network exchanges. In the hierarchical method the main

exchange of knowledge occurs from the top of the organization to the bottom.

The transfer of knowledge in the opposite direction, from the bottom of the


35

organization to the top, is only acceptable under explicitly developed

organizational rules. The inter-functional exchange transfers knowledge between

internal suppliers and internal customers, which results in fulfillment of self-

serving needs and little understanding of the customer. The network exchange

involves the meeting of common interests through internal communities.

These patterns are not successful on their own, but in marketing where

relationships are vital, the use of each exchange process impacts internal

marketing (Ballantyne, 2003). The use of hierarchical exchanges are recognized

when upper management provides support for internal marketing, and when the

marketing employees provide explanations for the opportunities and threats

recognized by various members (Ballantyne, 2003).

When successful, the marketers may use inter-functional exchanges throughout

various departments when trust is earned. This allows for the creation of

alliances and a true understanding of job design, the environmental setting, and

complete knowledge of employee skills which all significantly impact quality.

When deficiencies are discovered necessary changes may be implemented to

improve performance. These problems may be solved through the use of any of

the three exchange processes, but the use of employees throughout the

organization allows for a network exchange and the development of diverse

ideas (Ballantyne, 2003). The implementation of these ideas then requires the


36

use of all three exchanges again and a continuous cycle is developed with a goal

of continually improving quality.

Figure 1.1: Knowledge Exchange Patterns within Organizations. (Adapted from

Ballantyne, 2003, p. 1246)

Pattern 1: Hierarchical Exchanges

Pattern 2: Inter-functional Exchanges

Pattern 3: Network Exchanges

The implementation of internal marketing through these exchange processes

demonstrates how service quality may not be isolated to external customers.

This is especially true in service organizations where front-line employees

represent most of the contact with customers (Wasmer & Bruner II, 1991).

Internal marketing began as a method to motivate and satisfy employees,


37

developed through a customer orientation phase, and now is an essential

method for the recognition and implementation of change (Rafiq & Ahmed, 2000)

but it gains legitimacy when an external market relevance exists (Ballantyne,

2003). The product must be sold from one level to the next through the use of

external marketing techniques. This requires the higher of the two levels to

understand the functional qualities, technical qualities and corporate image of all

customers, plus they must understand how to sell the product, then they must

receive feedback and utilize this information to enhance the products and

services offered by the organization in order to make continual improvements.

The amount of feedback and ability to make necessary changes is dependent

upon the information exchange pattern that exists (Ballantyne, 2003).

2.2.6 Feedback

The idea was discussed that internal marketing allows for feedback, and Legare

(1996) examined methods to make feedback relevant and useful. First,

organizational members must design and collect feedback for it to be useful.

Research also discovered face to face is better than written information,

feedback meetings affect the quality of interaction, and upper management

involvement must include follow-ups (Legare, 1996). The collection and use of

feedback never ends, improvement is continually needed.

However, Ofir and Simonson (2001) through five experimental studies

determined customers should not be informed prior to the service that they will


38

be expected to evaluate the product. The use of this method leads to under

representative and overly negative evaluations. Traditionally, feedback has been

considered information only collected from the end user, but internal customers

also recognize problems which affect the quality for all consumers (Finn, Baker,

Marshall, & Anderson, 1996). One advantage of acquiring feedback internally is

these individuals are professional consumers and therefore have greater

knowledge about the services provided. The internal customer has needs and

expectations that are expected to be met through specified designs.

The methods of change include a balance of internal and external marketing,

treatment of employees, the affects of limitations, and ideas for implementation in

a practical atmosphere.

2.2.7 Implementation through External Marketing Techniques

The implementation of internal marketing first requires an understanding of how

knowledge is transferred (Ballantyne, 2003) but for it to be truly a marketing

related phenomenon, it must utilize marketing activities (Gronroos, 1994). If it

fails to resemble “traditional” marketing activities, then the critiques provided by

human resource scholars are justified. Marketing has been defined as: “an

organizational function and a set of processes for creating, communicating, and

delivering value to customers and for managing customer relationships in ways

that benefit the organization and its stakeholders” (American Marketing

Association, 2004). The definition demonstrates a need to create relationships


39

that benefits all stakeholders. Marketing typically involves the marketing mix (4

P’s) product, price, place, and promotion, but this is believed to be overly

simplistic. Researchers rarely challenge the concept and the marketing mix

focuses on short term objectives, where marketing must create a long term

approach through the creation of relationships (Gronroos, 1994).

The relationships are effective internally and externally through adaptability,

flexibility, and responsiveness (Gronroos, 1994). Current methods in service

marketing research create these relationships and include understanding

customer expectations, service encounters, servicescapes, service failures,

service recovery, and use of relationship marketing.

2.2.8 Link with External Marketing

Management must link internal marketing to external marketing (two-way

branding), and send similar messages to both parties. Mixed messages will

create internal problems that will extend to the external market. This creates

stronger internal beliefs and values. If employees do not agree with the external

campaign the success of the product is impossible. It is important to create an

external campaign that internal members agree with and embrace, then allow

management to share success stories in order to reinforce the benefits of the

new campaign (Mitchell, 2002).


40

The research by Lings and Brooks (1998) and Lings (1999) stressed the

importance of balancing the effort applied to both internal and external marketing

in order to achieve maximum effectiveness. One method is to improve the

interaction between internal suppliers and employees due to the ability of these

groups to identify areas for improvement but warns of the differences between

the needs of internal members and external customers. Prasad and Steffes

(2002) continued one step further and stated internal marketing must precede

external marketing, if not the organization may offer a service it is unable to

provide.

The external customer focuses on the process of the service experience and

therefore, it is important to understand the behind the scenes process for proper

implementation at the moment of truth, when the transaction occurs. The reason

is due to increases in service industries where front line employees constitute the

majority of the contact with consumers, especially in industries where the

customer is not a passive receiver (Lings, 2004).

Ahmed et al. (2002) stated the best method to relate internal customers with

external customers is to conduct similar market research. In order to understand

the internal customers it is important to segment the employees, develop a

marketing mix, and control for market activity. This is information may be

compared and contrasted with data received from external customers to

determine differences and similarities and allow for proper product and service


41

development. The research creates contradictory ideas of whether it is important

to start with internal or external marketing in order to obtain success (Lings,

1999). The best method must include the use of internal market research

simultaneously (Ahmed et al., 2002) with external research in order to compare

and contrast results and then implement the ideas internally first. This will allow

employees to feel involvement, create an attachment to the product, and sell it to

external customers, but no matter how it is developed the employees are the key

ingredient to this concept (Mitchell, 2002).

2.2.9 Employees

The definitions of internal marketing discuss the need to recruit, train, attract,

motivate, communicate, and retain employees through awareness in order to

meet their wants and needs. One author even stated the need to “woo”

employees (Cahill, 1995). If these are not met then the satisfaction of external

customers is difficult, if they are met then employees become committed, co-

operative, and enthusiastic about the organization (Ahmed et al., 2002;

Ballantyne, 2003; Berry, 1981; Cahill, 1995; Lings & Brooks, 1998; Mudie, 2003;

Prasad & Steffes, 2002; Rafiq & Ahmed, 2000; Varey & Lewis, 1999). The

cultivation of internal marketing internally involves the blurring of departmental

lines through increased communication which increases the knowledge,

information, and ability for feedback within the organization. This allows for the

creation of marketing orientations through increased satisfaction which increases

profits, sales growth, and new product success that must include internal factors


42

(Lings, 1999). Ahmed and Rafiq (2003) described the barriers between

departments and hierarchical levels must be removed for effective internal

marketing to exist. The organization must develop individual relationships

amongst members. Involvement is needed from all resources including people,

financial, and technical to obtain success. It is cultivated through the creation of

relationships based upon understanding, intimacy, trust, and commitment,

internal marketing is ineffective without these four items, especially trust. Trust is

needed to remove the fear within employees and encourage the proper actions,

behaviors, thoughts, and beliefs to create affective internal marketing. Cahill

(1995) in the elimination of departmental barriers titled the idea as learning

organizations.

The concept discussed how people learn as a collection, and this allows for

organizations to change, accelerate learning, allows for full participation, and the

creation of memory, but the downside is the ideas are not quantifiable. This

process allows all members to become active within the organization. The most

comprehensive method developed to create and cultivate this concept to date

was developed by Ballantyne (2003). The research discovered four phases to the

internal marketing cycle that included energizing, code breaking, authorizing, and

diffusing while each step is accomplished through learning activities,

spontaneous community, and knowledge renewal. The steps allow members to

learn the knowledge, apply it to problems, understand choices, and then extend

this knowledge to other organizational members. The final step involves the true


43

understanding of the customer and their needs. Internal marketing creates the

communication links between departments in order to create effective networks

and reduce the occurrence of market silos.

2.2.10 Energizing

Organizations need to seek and obtain the willing commitment of all employees

to work towards goals inside and outside the boundaries of their job descriptions.

Employees’ achievements are embraced in their emotions and jobs toward the

organization; therefore it is important that the processes of internal marketing

take into consideration the values of the employees who are expected to

accomplish them. Employees need to be given the opportunity to change and

improve procedures that constrain them from providing a superior service to

internal and external customers. The recruitment of frontline employees should

focus on attracting employees who have a passion to put customers first and

strive for the ability to do just that. However, as individuals, frontline employees

can accomplish very little, therefore, it is important to stress the value of

teamwork to them as well as to provide them with support from back office

employees. Employees working in a healthy team environment have the

opportunity to learn from each other resulting in their common knowledge and

trust in each other being their strength. Organizations need to energize the

sharing of common knowledge internally among their employees therefore they

are challenged to create a working environment in which employees are willing to

share their tacit knowledge and subjective insights among each other. The


44

success of tacit knowledge sharing requires unequivocal conditions of trust

between the organization and employees.

2.2.11 Code breaking

Organizations need to determine their internal and external customers’

requirements and then translate these known customer requirements into a

programme for detailed changes in production or service delivery by utilizing

employees’ knowledge. Organizational attempts to discover and uncover

potential operational solutions to customer problems are a clear sign of positive

customer-conscious actions. The inclusion of employees in customer focused

problem-solving increases their self-worth and purpose within the organization.

Organizations which encourage employees to share their personal knowledge for

problem solving also provides them with the confidence to challenge and suggest

changes to internal policies and procedures that do not add value or constrain

their job performances. Code breaking refers to the discovery of new knowledge

with the intent to go beyond deploying knowledge in the work environment.

However, transforming tacit knowledge into explicit knowledge to understand the

customer needs and provide solutions requires personal commitment and trust in

the organization from all employees taking part in the process. Therefore, it is

essential that employees should be able to see the value that their participation

has added to the organization. Knowledge redundancy is often the result of lack

of communication between employees and business units in organizations.

Encouraging employees’ involvement in processes between different business


45

units can provide a solution for the transformation of tacit knowledge into explicit

knowledge. However, organizations must acknowledge that this involvement

process requires frequent and effective communication between the various

functions and business units. Cross-functional involvement gives managers and

employees the opportunity to examine and participate in procedures that they

have always taken for granted.

2.2.12 Authorizing

In the work environment employees are faced with making choices between cost

benefit options and gaining approval from management. Management and

employees who are involved in dysfunctional processes that relates to the cross-

functional borders of the organizations require explicit knowledge and listening

skills. Organizations need to acknowledge that the implementation of internal

changes can impact negatively on certain employees and management therefore

needs well-documented arguments to provide reasons and explain the benefits

of the change to all in the organization. Employees need to have an

understanding of the broader context within which the organizational functions.

Authorizing signifies the challenges organizations face in communicating explicit

knowledge across the boundaries of functions and business units. Internal

marketing can be used to provide the communication needed between functions

and business units that can lead to the understanding of change decisions.

Subsequently feedback from employees can lead to new change processes that

add value to the organization.


46

2.2.13 Diffusing

Newly acquired knowledge needs to be circulated across the functional

boundaries of the organization. It is common knowledge that organizations have

hierarchical divisions that constrain interaction across internal borders resulting in

the distortion of two-way communications. Circulating new knowledge goes

beyond passing on verbal messages. New knowledge is passed on through

activities that are part of learning new behaviors and therefore should always be

complimentary to the organization’s objectives and contribute to goal reaching

strategies. Diffusing new knowledge should not only be seen as the processing

of objective information but also as a transformation of explicit knowledge into

tacit knowledge. Explicit knowledge obtained from communication should be

transferred back into training programmes, policies and procedures to become

tacit knowledge that employees can utilize to add value to their job performances

and ultimately to the competitive advantage and profitability of organizations.

Internal marketing should be seen as a tool for generating explicit and tacit

knowledge that can be shared across the functions of the organization to add

value to employees as well as customers of organization. Existing knowledge of

value in organizations must be identified and shared across the boundaries of

functions to improve organizational policies and procedures. Subsequently

organizations and employees should be challenged to discover new knowledge

that can be distributed among employees and functions to add value to the

organization.


47

The inputs into the four-cycle phase include participant knowledge and market

intelligence and the outputs include relationship quality, customer consciousness,

and enhanced market performance. While the ideas appear plausible, limitations

were discussed by researchers throughout the literature.

2.2.14 Limitations

Varey and Lewis (1999) described four limitations discovered through an

examination of literature and determined that this approach appears to be a

metaphor, philosophy, set of techniques, and an approach that interferes with

HRM practices. Managers currently market to employees and it was stated that

employees must change their perceptions and values which current training

programs currently handle. Internal marketing is simply a method to create

flexibility and reduce the amount of control by management.

Mudie (2003) listed seven areas where research in this area was limited and may

create difficulties in the determination of whether positive outcomes truly exist

through the implementation of internal marketing. The list included:

(1) The authenticity of internal customers,

(2) Differences between the internal and external identities,

(3) The differences in experiences between the customer and employee,

(4) The dissonance that exists,

(5) The power differential between customers and employees,


48

(6) Trust, and

(7) The fickleness of customers that always exists.

2.2.15 Implementation

While these limitations exist, the idea of creation and cultivation of internal

marketing allows for a change in the organization where new set of goals and

institutional objectives may be created (Wasmer & Bruner II, 1991). While

backlash may result for employees and the importance of timing to implement

these changes is a major issue, this concept allows for the improvement of

communication, departmental interaction, and if accomplished provide

profitability for the organization and fulfill the needs of employees.

The integration of the ideas discussed must be accomplished in order to obtain

success. The internal marketing plan must be implemented by top management,

human resources, and marketing and supported by all areas. Crosby and

Johnson (2003) described the importance of leadership and the need for these

individuals to “walk the talk”, understand the reality of the workplace through

hands on assistance, and understand the affects on profitability for a successful

internal marketing campaign.


49

Parasuraman, Berry, & Zeithaml (1991)

Hogg, Carter, and Dunne (1998)

1. Compete for talent 1. Communication 2. Offer a vision and provide a purpose 2. Staff training

3. Equip employees with skills and knowledge for their

3. Appraisal and feedback

4. Bring people together as a team 4. Customer consciousness 5. Leverage the freedom factor

Varey and Lewis (1999) 6. Nurture achievement through measurements and rewards

1. Dissemination of information from all internal groups

7. Base job design decisions on research 2. Development of competence Ballantyne, Christopher, and Payne (1995)

3. Development of incentive and motivation systems

1. Staff selection Ahmed, Rafiq, and Saad (2003)

2. Training design and measurement of competency

1. Strategic rewards

3. Staff climate monitors 2. Internal communications 4. Internal communications 3. Training and development 5. Support for quality improvement 4.Organizational structure (not

significant) 5. Senior leadership 6. Physical environment

6. Physical environment 7. Staffing, selection, and

succession 8. Inter-functional coordination 9. Incentive systems 10. Empowerment 11. Operational/ process changes

Table 3.0, Methods for Implementation of Internal Marketing Concepts


50

2.2.16 Consequences

Three types of consequences developed, the outcomes that directly affect the

organization, directly affect the employee, and ideas where all entities benefit.

The first involved the organization and the consequence was the ability to

improve service quality for external customers. One method of monitoring and

measuring service quality is to conduct staff climate monitors on a quarterly basis

and this may occur between and within various levels of the organization in order

to measure quality of work life (Ballantyne et al., 1995).

Prasad and Steffes (2002) stated if an incentive is used to benefit the employees,

the organization may lie about the amount of profits gained and therefore share

in order to receive the greatest effort from employees. In this situation the firm

may burn money in order to decrease the amount shared in an effort to maintain

the motivation level amongst employees. If money burning is conducted properly,

it may signal success or employees may believe it is poor management,

therefore, holding an adverse affect.

The consequences for the individual include mutual trust, the creation of

relationships, internal networks, self-direction, commitment, loyalty, and

motivation (Varey & Lewis, 1999). When properly implemented the employee

gains empowerment which increases job security, satisfaction, and development

as an employee (Rafiq & Ahmed, 2000; Amato & Amato, 2002).


51

One consequence that benefits everyone involved is the creation of brand loyalty

by organizational members. Fram and McCarthy (2002) believed the increase in

loyalty resulted in an increase in satisfaction with management, and this feeling is

passed to family and friends which results in additional revenue for the

organization. The evidence for this thought process rests in the fact that about

30% of employees purchase their brand less than half the time, and only 36% of

the organizations involved in the study have active internal marketing programs

(Fram & McCarthy, 2002). Ahmed and Rafiq (2003) described this as the

continuous circle that feeds upon itself.

2.2.17 Marketing

The marketing mix was developed throughout the 1950’s and 1960’s (Borden,

1964; McCarthy, 1964; Gronroos, 2002) as a method to optimize profit and act as

guidelines in marketing decisions. The intention of the marketing mix was to

create ideas on how to solve marketing problems not as a method to fix them.

This creates a situation where service organizations focus on “to whom

something is done” (p. 132) instead of “for whom” (p. 132). The “to whom”

mentality demonstrates a product-oriented not service oriented approach, where

the seller has an active role and the consumer is passive (Gronroos, 2002).

Current marketing techniques attempt to focus downstream through service-

based advantages and customer allegiances. It is no longer simply the product

but the intangibles that are associated with the product that create additional


52

revenue (Wise & Baumgartner, 1999) and customer expectations must be met.

Expectations affect satisfaction levels which significantly impact the customer

defect rate and this occurs through the fulfillment of basic customer needs: (1)

security, (2) justice, and (3) self esteem (Schneider & Bowen, 1999).

In order to meet these needs organizations must exceed customer expectations

through responsiveness, assurance, and empathy. These expectations rise and

customers grow in loyalty and knowledge, therefore companies must take a

customer first approach. Difficulties develop from employees who fail to fix

problems and this is resolved through the creation of relationships (Parasuraman

et al., 1991). Current methods in service marketing research create these

relationships and include understanding customer expectations, service

encounters, servicescapes, service failures, service recovery, and relationship

marketing.

2.3 Service Quality

Parasuraman, Zeithaml and Berry (1988, p. 16) defined perceived Service

quality as “a global judgment, or attitude, relating to superiority of the service”.

Additionally they linked the concepts of perceptions and expectations as follows;

Perceived quality is viewed as the degree and direction of discrepancy between

consumers’ perceptions and expectations’. Perceptions are defined as consumer


53

beliefs concerning the service received (Parasuraman, Zeithaml and Berry 1988)

or experienced service (Brown and Swartz, 1989). Expectations are defined by

Parasuraman, Zeithaml and Berry (1988, p 17) as ‘desires or wants of

consumers i.e., what they feel a service provider should offer rather than would

offer. Service quality has been described as a form of attitude, related but not

equivalent to satisfaction that results from the comparison of expectation with

performance (Bolton and Drew, 1991a; Parasuraman, Zeithaml and Berry, 1998).

Though researchers admit that the current measurement of consumers’

perception of service quality closely conforms to the disconfirmation paradigm

(Bitner, 1990; Bolton and Drew, 1991a) they also suggest that service quality and

satisfaction are distinct constructs (Bitner, 1990; Bolton and Drew, 1991a, b;

Parasuraman, Zeithaml and Berry 1988). The difference between the two is that

perceived service quality is a form of attitude a long-run overall evaluation,

whereas satisfaction is a transaction specific measure (Bitner, 1990; Bolton and

Drew, 1991a; Parasuraman, Zeithaml and Berry, 1998). Parasuraman et al.

(1988) further suggest that the difference lies in the way disconfirmation is

operationalized. However, such differentiation appears to be inconsistent with

Woodruff, Cadotte and Jenkins’ (1983) suggestion that expectations should be

based on experience norms. SERVQUAL is the most highly cited and the original

of the two instruments created by Parasuraman, Zeithaml, and Berry (1985,

1988). b).The idea was developed that customers compare the fulfillment of

actual and expected service quality. A second approach involves expectancy

theory; this examines customer beliefs on the outcome of a service transaction


54

(Clow, Kurtz, Ozment, & Ong, 1997). The third approach focuses on the

fulfillment of wants and needs through the service (Clow et al., 1997), but the

challenge occurs in how to address these expectations.

Three characteristics of service exist: (1) they are physically intangible, (2) it is an

activity not a thing, and (3) production and consumption are simultaneous in

some manner (Gronroos, 1982). The difference for the consumer is they are part

of the process and therefore influenced by the production process. When an

interaction occurs between an organization and a customer a service exchange

exists. This is a psychological contract in which a need is gratified in exchange

for money, time, and effort (Schneider and Bowen, 1999). Consumers have

difficulty in evaluating the exchange since it is mentally and physically intangible,

but ultimately they will create a level of service quality.

Service quality is “a global judgment, or attitude, relating to the superiority of the

service” (Parasuraman, Zeithaml, & Berry, 1988, p. 16) and it continues to

increase in importance as service industries grow and outnumber manufacturing

organizations (Storbacka, Strandvik, & Gronroos, 1994). Shank (1999), the

problems occur in how to both operationalize and measure the concept.). The

buyer will create a perception of quality that must be understood by the

organization. An individual will compare the perceptions of what occurred verse

what was expected and this is mediated by the amount of involvement the

consumer has is the process (Gronroos, 1982, 1984).


55

Early research focused on services through benefits participants desired and

they were divided into primary and secondary levels (Chelladurai et al., 1987).

Wright, Duray and Goodale (1992) utilized the SERVQUAL instrument in a

recreational sport setting, and upon analysis of the data, believed the questions

were too general to be used in recreation and recommended the use of more

specific questions.

SERVQUAL is the most highly cited and the original of the two instruments

created by Parasuraman, Zeithaml, and Berry (1985, 1988). The instrument

determines the disconfirmation of an experience based upon the differences

between the perception and the expectations of service quality. When perception

exceeds expectations, the results represent satisfaction, and when the

perception is less, it represents dissatisfaction. The original instrument contains

22 items across 5 dimensions. The subjects answer each question twice once

based upon perceptions and once on expectations which then creates a P-E gap

score. The overall service quality is determined by the sum of all the gap scores.

Parasuraman, Zeithaml and Berry originally identified 10 determinants of service

quality based on a series of focus group sessions (1985).


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1. Reliability

2. Responsiveness

3. Competence Tangibles

4. Access Reliability

5. Courtesy Responsiveness

6. Communication Assurance

7. Credibility Empathy

8. Security

9. Understanding the customer

10. Tangibles

They subsequently developed SERVQUAL (1988), which recasts the 10

determinants into five specific components.

Model of Service Quality Gaps

There are seven major gaps in the service quality concept, which are shown in

Appendix 3. The model is an extension of Parasuraman et al. (1985). According

to the following explanation (ASI Quality Systems, 1992; Curry, 1999; Luk and

Layton, 2002), the three important gaps, which are more associated with the

external customers, are Gap1, Gap5 and Gap6; since they have a direct

relationship with customers.


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Gap1: Customers’ expectations versus management perceptions: as a

result of the lack of a marketing research orientation, inadequate upward

communication and too many layers of management.

Gap2: Management perceptions versus service specifications: as a result of

inadequate commitment to service quality, a perception of unfeasibility,

inadequate task standardization and an absence of goal setting.

Gap3: Service specifications versus service delivery: as a result of role

ambiguity and conflict, poor employee-job fit and poor technology-job fit,

inappropriate supervisory control systems, lack of perceived control and lack of

teamwork.

Gap4: Service delivery versus external communication: as a result of

inadequate horizontal communications and propensity to over-promise.

Gap5: The discrepancy between customer expectations and their

perceptions of the service delivered: as a result of the influences exerted from

the customer side and the shortfalls (gaps) on the part of the service provider. In

this case, customer expectations are influenced by the extent of personal needs,

word of mouth recommendation and past service experiences.


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Gap6: The discrepancy between customer expectations and employees’

perceptions: as a result of the differences in the understanding of customer

expectations by front-line service providers.

Gap7: The discrepancy between employee’s perceptions and management

perceptions: as a result of the differences in the understanding of customer

expectations between managers and service providers.

2.1.1 Customer Expectations

The intangibles associated with the product create additional revenue and are

important because customer loyalty now exists to stores. This allows

organizations to create service based advantages (Wise & Baumgartner, 1999).

The creation of these advantages allows organizations to meet their needs and

exceed their expectations. The best method to understand customer

expectations is to visualize the experience from their point of view (Chase &

Dasu, 2002) in order to understand their perceptions (Iacobucci & Nordhielm,

2000). This allows the organization to recognize and meet core needs of

customers which creates a perception of reliability from the consumer’s

perspective. When these are met the organization may provide responsiveness,

assurance, and empathy in order to exceed customer expectations

(Parasuraman et al., 1991).


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In discussions on service quality and in the development of the SERVQUAL

instrument (Parasuraman et al., 1985, 1988), the idea was developed that

consumers compare the fulfillment of actual and expected service quality. A

second approach involves expectancy theory; this examines customer beliefs on

the outcome of a service transaction (Clow, Kurtz, Ozment, & Ong, 1997). The

third approach focuses on the fulfillment of wants and needs through the service

(Clow et al., 1997), but the challenge occurs in how to address these

expectations.

Zeithaml, Berry, and Parasuraman (1993) through focus groups determined

expectations develop through expected, desired, adequate, and predicted

services. Within each service experience consumers create this level of

expectation they hope to receive. Individuals create a zone of tolerance of the

service they are willing to accept and if the organization fails to obtain this level,

they become dissatisfied. The expectations of the service are developed through

promises, word of mouth, communications, and past experiences.

The perceived expectations results in both short-term and long-term

consequences (Gagliano & Hathcote, 1994). While in the short-term a customer

may simply leave the store, in the long-term the customer may defect, this result

in lost value and increased replacement costs. The ability to effectively provide

service may be recognized through an examination of specialty stores where an

increased amount of interaction exists and consumer needs are specifically met


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(Gagliano & Hathcote, 1994). Customer expectations are created prior to each

service encounter.

2.3.2 Service Encounters

The experience perceived by a customer is reality, which is based upon the

service encounter. Customers create this perception on a few moments of the

entire encounter. The ability of the organization to recognize the extreme points

of the experience (Chase & Dasu, 2002) and hold an understanding of industry

standards allows for benchmarking (Iacobucci & Nordhielm, 2000). This allows

the organization to create strong finishes to the service that will last in the mind of

the consumer (Chase & Dasu, 2002).

Service encounters consist of the interactions between members of the

organization and the customer; it is reciprocal not linear (Ligas & Coulter, 2001).

As previously discussed the consumer will create expectation levels prior to the

encounter, but when the interaction begins the roles created, the emotions of the

employees, how the information is communicated, and the atmospherics that

exist will either confirm (disconfirm) the expectations developed.

Pugh (2001) examined bank customers through exit interviews and determined

that the emotions of employees were contagious. If the employee displayed

positive emotions, similar affect was developed within customers and the


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emotions of the employees were influenced through situational factors and

employee characteristics.

The emotions of employees may be displayed through non-verbal

communication which includes “facial expression, eye contact, posture, gesture,

and inter-personal distance” (Gabbott & Hogg, 2001, p. 6) and represents 90% of

the communication process. Non-verbal communication is continuously displayed

by the sender and interpreted by the receiver during an encounter. In service

industries where the product is co-produced and understanding of how these

actions affect service quality is important. The non-verbal cues are also affected

by the physical environment.

Hoffman and Turley (2002) integrated service encounter and atmospheric

literature. Atmospherics was defined as, “the intentional control and manipulation

of environmental cues” (Hoffman & Turley, 2002, p. 34) with a goal of influencing

behaviors. Organizations accomplish this through stimuli that effect all members

and customers to affect the perceived quality of the service. Atmospherics

consist of both tangible and intangible elements and create emotional reactions

but this study failed to statistically examine the phenomenon. A more specific

approach to atmospherics is servicescapes.


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2.3.3 Servicescapes

Servicescapes are “the built environment (i.e., the manmade, physical

surroundings as opposed to the natural or social environment)” (Bitner, 1992, p.

58). These perceptions are created through the environment (music, color, scent,

and crowding), atmosphere, and physical attractiveness of the store (Baker,

Parasuraman, Grewall, & Voss, 2002). Together these create an affective

reaction within the customer where they make judgments based upon cues and

this ultimately allows them to create a price level. As the perceived price level

increases, greater emphasis will be placed on improving interpersonal service

quality; therefore, perceptions of employees are important within servicescapes

(Baker et al., 2002).

Servicescapes is developed through the facility exterior, interior, and other

intangibles and contribute to the evaluations produced by customers (Hoffman &

Turley, 2002). Servicescape is composed of three dimensions: ambient

conditions, spatial layout and functionality, and sign, symbols, and artifacts

(Bitner, 1992). The ambient conditions consist of “temperature, lighting, noise,

music, and scent” (Bitner, 1992, p. 66), which affect all five senses. Spatial layout

refers to how all the items within a store are arranged and the functionality

determines if they accomplish the goals intended. Signs, symbols, and artifact

create detail in the physical environment and provide aesthetic communication.


63

In order to improve the servicescapes of new facilities Peterson (2003) described

how to include consumer perspectives in the process. While architects have

specific styles, research must be conducted with consumers prior to the design

stage and following the finish of the new building. The pre-design information

must focus on how consumers from various backgrounds perceive an experience

and the collective ideas gathered must be implemented in the design. The post-

construction information must focus on both the design and aesthetics to

determine what worked and what did not to improve on future projects (Peterson,

2003). A good implementation of servicescapes will lead to low service failure

and recovery.

2.3.4 Service Failure and Recovery

In understanding customers, companies are able to recognize and handle

complaints. Many consumers become upset on how problems are handled and

often never state problems exist. Each company must create a simple process

through proper management in order to learn from customers with the hopes of

increasing service quality. The complaints may occur externally or internally, but

when handled properly organizations may recover from service failure through

involvement while utilizing the complaints strategically to improve products and

services. Ultimately, effective service recovery assists in the creation of long-term

relationships (Johnston & Mehra, 2002).


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The goal of every service encounter is to provide the best service in the best

physical environment possible, but service failure may occur. In all industries

organizations claim customer satisfaction and quality but the ability to address

service failures and properly rectify the situation separates organizations and

create loyalty (Verma, 2001). The ability to retain 5% more customers increases

profits by 100% (Verma, 2001).

The service encounter failure may occur due to the outcome (what they receive)

or the process (how they receive it), and the magnitude of the loss (Smith,

Bolton, & Wagner, 1999). The complaint may be provided through redress

seeking, negative word of mouth, or exit, (Andreassen, 2000), but Smith et al.

(1999) added that 70 to 95% of dissatisfied customers never voice their opinion.

The dissatisfaction typically creates a halo effect where a negative perspective

persists for customers or a domino effect where failures become typical (Palmer,

Beggs, & Keown-McMullan, 2000). As a result many firms have created

standardized procedures to reduce the chance of service failure (Palmer et al.,

2000).

When service failure occurs how an organization handles the recovery greatly

affects the perceived service quality. Smith et al. (1999) identified four methods

to recovery: compensation (discounts, merchandise), response speed, apology,

and initiation (the organization seeks the customer for recovery).


65

Therefore, organizations must identify unsatisfied customers, address the

situation, focus of the outcome and not the process, and then provide a fair

solution to ensure future revenue. Customers expect a speedy, apologetic, fair

resolution to their problem; as a result, employees must be empowered to handle

situations with unsatisfied customers (Andreassen, 2000; Palmer et al., 2000).

Proactive organizations have created blueprints on the process to recover from

service failure (Palmer et al., 2000). The difficulty with this technique is the belief

all customers have the same expectations and similar service failures. The result

of a good recovery often creates loyal customers based upon the goodwill

established (Palmer et al., 2000). Maxham III and Netemeyer (2002) examined

this point, and determined through longitudinal research that when a situation

moves from a loss (service failure) to a gain (service recovery), loyalty is created.

The findings of this study revealed that regardless of the time lag between or the

similarity of failures that the perception diminishes equally (Maxham III &

Netemeyer, 2002). The researchers stated (p. 67), “do not make the same

mistake twice,” implement feedback and develop relationships in order to avoid

these situations.

2.3.5 Service Quality Importance

The importance of service quality continually increases as more emphasis is

placed on meeting the expectations of customers. As the client increases the

amount of involvement, the more likely the individual will recognize flaws in the


66

service provided. The effects of the miscues will vary dependent upon the

previous preconceived images of the firm by the customer. In order to handle

this, the organization must understand what the customer expects, how they

expect to receive it, and the image held by this individual prior to the service

experience. Traditional marketing techniques must provide realistic goals that

may be obtained by the organization (Gronroos, 2002).

Traditionally, organizations focused on the technical quality of the product or

simply what needs were being fulfilled and failed to address how they were

fulfilling those needs. Today, organizations attempt to create distinct competitive

advantages that competition may not have or have difficulty in duplicating. This

will allow the company to obtain sustained success and create a new benchmark

within the industry (Barney, 1991).

The importance of service has increased due to co-production with customers.

They hold greater knowledge and skill to help create the products and services

(Prahalad & Ramaswamy, 2000), therefore placing greater emphasis on the

process. The process consists of the interaction with front-line employees,

service quality, and the perceived transaction time (McClain, Thomas, &

Mazzola, 1992; Metters, King-Metters, & Pullman, 2003; Schmenner, 1995;

Schroeder, 1985). Therefore, all the steps in the customer buying experience

must be understood from both the organizational and customer perspective

(Iacobucci & Nordhielm, 2000).


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Currently, modern technology allows the customer to gain significant background

information on industries, companies, and products. Therefore, customer

conversations are amongst equals, and the burden is placed on organizations to

keep dialogue alive. Also, through this technology customers may share their

experiences with larger groups of people (Prahalad & Ramaswamy, 2000).

Technology has also placed pressure on organizations to quickly change to

customer needs and the ability to accomplish this rests in the culture of the

organization (Stuart, 1998).

The service provided by the organization affects the experience of the customer.

Perception is reality and what really matters is how the customer perceives the

experience. Customers base their own opinions on a few moments of the entire

experience, often high or low points and the end (Chase & Dasu, 2001).

Therefore, the experience must end on a positive note and the organization must

attempt to alter a neutral experience into a positive experience (Morgan & Rao,

2003). Companies must discover what the customer’s value and how they obtain

outcomes (Ulwick, 2002), but service quality measurement is difficult because

two customers rarely perceive similar outcomes (McClain et al., 1992; Metters et

al., 2003; Schmenner, 1995; Schroeder, 1985).


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2.3.6 Creation of Service Quality

In order to achieve superior service, management must create an overall strategy

with a strategic vision that identifies the target market, understands the

customer’s point of view, understands the abilities of the organization, and

provides a strong service delivery system (Metters et al., 2003). Superior service

is accomplished through providing value to the customer and utilizing operations

to achieve the goals (McClain et al., 1992).

The importance of a positive culture in a service setting rests in the ability to

increase efficiency, and maximize value in the perception of consumers and this

is accomplished through quality and innovation (Michela & Burke, 2000).

Organizations must ensure reliability, responsiveness, assurance, and empathy

in order to exceed expectations and when the customer expectations are met,

customer knowledge grows and loyalty is created. These expectations create the

need for a customer first mentality which is often difficult when employees lack a

willingness to fix problems. Organizations must determine the gap between

perceived to adequate services and perceived to desired states (Parasuraman et

al., 1991). Today, customers buy more than just a product, therefore,

personalization and customization are necessary (Prahalad & Ramaswamy,

2000).

“In service industries, customer satisfaction is always influenced by the quality of

interactions between customers and the personnel involved in the contact


69

services” (Natalisa & Subroto, 2004, p. 86), and this is developed through the

difference in perceived and actual quality during the service experience.

Satisfaction is created by an excellent staff, efficient operations, convenience,

competitive costs, and excellent image (Jones, 2004) which often leads to a

repeat purchase (Laroche, Ueltschy, Abe, Cleveland, & Yannopoulos, 2004).

2.3.7 Outcomes

Customer satisfaction is a revenue and retention building process. The goal of

each business transaction is to gain customers and retain them through trust and

commitment (Anderson & Narus, 1998). The creation of value and trust affects

current marketing strategies which influences the lifetime value of each customer

and directly impacts current and future sales (Rust, Moorman, & Dickson, 2002;

Zeithaml, Rust, & Lemon, 2001).

An organization will maximize profit by focusing on the needs of the most

valuable customers through line extensions, service, and amenities; this will

create a competitive advantage within an industry (Anderson & Narus, 1998;

Zeithaml et al., 2001). These needs are fulfilled through a service exchange that

consists of a psychological contract in which a need is gratified in exchange for

money, time, and effort (Schneider & Bowen, 1999). The level of satisfaction

obtained translates into the level of loyalty and the level of satisfaction created

significantly impacts the customer defect rate. The cost of attracting customers is

approximately five to six times greater than retaining a customer, and therefore,


70

the greater the retention, the greater the effect on profitability (Hoogervorst,

Koopman, & van der Flier, 2002).

As stated previously, three basic characteristics distinguish service: (1) it is

physically intangible, (2) activity not a thing, and (3) production and consumption

are simultaneous in some manner. Whether the interaction is physical or

technical, this interaction assists in fulfilling the needs of the customers and often

in with the assistance of the individual (Gronroos, 1982).

2.3.8 Empirical Examination

Little empirical evidence exists to support the ideas of internal marketing with no

replication of any created instrument. Lings and Brooks (1998) extended to the

SERVQUAL to internal markets, while Foreman and Money (1995), Prasad and

Steffes (2002), Ahmed et al. (2002), Fram and McCarthy (2003), and Naude,

Desai, and Murphy (2003) each created their own instruments through a review

of literature. Finally, Amato and Amato (2002) performed a content analysis of

mission statements from major corporations.

Lings and Brooks (1998) utilized the SERVQUAL scale to examine internal

service quality. They created new dimensions through interviews with internal

customers (the added dimensions were proactive decision making and attention

to detail). External service quality was examined utilizing the original dimensions

of the SERVQUAL instrument. The service quality exchanges represent


71

interactions either internally or externally, where a level of service quality is

developed. The ability to understand the perceived levels of service quality after

each interaction allows organizations to recognize organizational flaws. The

instrument was administered a second time, six months after the initial

examination. These results demonstrate the implementation of internal marketing

improves internal service quality and influences external service quality.

Over the past twenty years two instruments have been created to measure

service quality: SERVQUAL and SERVPERF. Since its conception researchers

from various disciplines have attempted to modify it to their needs. The original

instrument contained 22 items across five dimensions and each subject

responded twice to each item, once on perceptions and once on expectations.

Over time the instrument has received scrutiny, Jain and Gupta (2004) listed

four: (1) the use of the P-E gap, (2) questionnaire length, (3) predictive power,

and (4) the dimensions. It is believed that service quality may be obtained from a

one-item scale. Van Dyke, Kappelman, and Prybutok (1997) stated the ability to

derive perceived serviced quality from subtraction is overly simplistic due to the

cognitive effort, they suggest directly asking the subject. Also, the measurement

of the expectation component holds multiple interpretations and is

operationalized differently by various researchers (Jain & Gupta, 2004).


72

The SERVPERF scale was developed by Cronin and Taylor (1992) as an

attempt to replace the SERVQUAL scale. The new scale contains 22 items that

focus on performance and the service quality is determined by the sum of all the

performance items, the higher the score the greater the service quality. Cronin

and Taylor (1992) believe this is more applicable due to empirical evidence in

various industries. Jain and Gupta (2004) tested both scales to determine greater

validity and measurement power though subjects at a fast food restaurant in

Delhi, India and determined SERVPERF outperformed SERVQUAL in both

areas. The SERVQUAL instrument has been utilized continually in assessing the

service quality in most industries and that is what I am adopting for the study of

the telecommunication industry.

The review of literature provides the foundation of this study and assisted in the

development of portions of the survey instrument. The last study described

represents the service quality portion of the questionnaire and the next chapter

provides greater detail on the methodology utilized in this research project.


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CHAPTER 3

METHODOLOGY

The third chapter discusses (a) overview of research methodology, (b) subject

selection, (c) instrumentation, (d) data collection procedures, and (e) data

analysis procedures which describe the procedures used to answer the research

questions proposed in Chapter 1.

3.1.1 Overview of Research Methodology

3.1.2 Types of Research

The study is based on two (2) sources of data: Secondary and Primary;

Secondary sources will include; published customer survey reports,

professional articles in business journals on topics of Internal Marketing and

Service Quality, Marketing and Telecommunication journals, Internet topics on

Internal Marketing and service quality, business newspapers, business books on

Internal Marketing and service quality.

Primary data collection methods will then follow with qualitative and

quantitative approaches. Questionnaires will be administered to Kasapa

employees. I intend to use in-depth and semi- structured interviews to generate

qualitative data from both Kasapa staff and Management. Customer satisfaction

questionnaire are also given to customers at the point of transaction.


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Qualitative Research

The two types of research design include qualitative and quantitative. Qualitative

research is defined as a “variety of research approaches that study phenomena

in their natural settings, without a predetermined hypothesis” (Ary, Jacobs, &

Razavieh, 2002, p. 565). This method avoids numeric data and gathers

information through detail obtained via interviews and observation. The

techniques include ethnography (field research), case studies (examination of

one unit), content analysis, naturalistic observation, focused interviews,

phenomenological studies (meanings vary by subject), grounded theory, and

historical research (Ary et al., 2002)

Quantitative Research

Quantitative research is defined as an, “objective measurement and statistical

analysis of numeric data to understand and explain phenomena” (Ary, et al.,

2002, p. 22). The purpose of this method is to examine either relationships or

cause and effect. It requires large samples examined through instruments that

tests a theory created prior to the study. Quantitative studies consist of

experimental and non-experimental research (Ary et al., 2002).

Within qualitative or quantitative research, there are numerous types of studies.

They are (a) descriptive, (b) associational, and (c) intervention-type. A descriptive

study helps describe events or things as carefully as possible. Associational


75

research investigates relationships, and intervention studies observe how a

method or treatment influences outcomes (Fraenkel & Wallen, 2000).

Survey research: - Within descriptive studies, the most common method to

answer the research question is a survey. Surveys attempt to answer the

question “What exists?” The advantages of survey research include: (a) the

possibility to collect a wide scope of information from a large population, (b) the

opportunity to deal with real situations, and (c) the development of research

beyond description only (Fraenkel & Wallen, 2000). Surveys are sent to

individuals who are known as respondents. The answers of the respondents

allow researchers to summarize the characteristics of individuals, groups, or

physical environments to the targeted population (Fraenkel & Wallen, 2000). The

population refers to the individuals that the findings of the survey represent.

Surveys may be accomplished in census form, where the entire population is

surveyed or a sample survey where only part of the population is studied (Ary et

al., 2002). Surveys are limited to studying tangibles and intangibles. Tangibles

are items 61 that can easily be measured such as frequency of physical activity

at Kasapa Customer service centres. Intangibles are limited to psychological and

sociological constructs such as attitude and opinions (Ary et al., 2002). In

addition, surveys are classified into two categories according to the time the data

was collected. The first is longitudinal which looks at information gathered at

points in time; this helps to observe changes over the time frame. A longitudinal

study may be accomplished by three methods: (1) a panel, where the same


76

group is studied over time, (2) a trend, where a different people from the same

population are studied, or (3) by a cohort study, where the same groups of

people are followed over time. The second category, cross-sectional studies,

examines a sample of the population at a specific time (Ary et al., 2002).

Internal marketing: - Research on internal marketing has focused primarily on

quantitative methods (Ahmed et al., 2002; Amato & Amato, 2002; Foreman &

Money, 1995; Fram & McCarthy, 2003; Lings & Brooks, 1998; Naude et al.,

2003; Prasad & Steffes, 2002) therefore; a quantitative, descriptive, cross-

sectional survey study design was used to answer the research questions asked

in Chapter 1. The aforementioned research studies were explained in Chapter 2

but each utilized a different instrument and approach to examine internal

marketing. Of these studies, five researchers utilized survey instruments for their

study (Ahmed et al., 2002; Foreman & Money, 1995; Fram & McCarthy, 2003;

Lings & Brooks, 1998; Naude et al., 2003), four were created through a review of

literature (Ahmed et al., 2002; Foreman & Money, 1995; Fram & McCarthy, 2003;

Naude et al.,2003), and the Lings and Brooks (1998) instrument was a replication

of the SERVQUAL instrument, but administered to examine internal service

quality. The researchers modified the items to examine internal perceptions,

while replication of this instrument was possible.

3.1.3 Subject Selection

3.1.4 Setting: - The setting of this study, in order to examine internal marketing,

is a case study of Kasapa Telecom Limted in Ghana. The examination of internal


77

marketing is best accomplished in a single setting due to the differences that

exist within each organization (i.e., Peccei & Rosenthal, 2000; Stuart, 1998). Ary,

Jacobs, and Razavieh (2002) described case studies as “an attempt to describe

the subject’s entire range of behaviors and the relationship of these behaviors”

(p. 440). It allows for depth and understanding into the present status of an entire

institution and allows for the development of future hypotheses, which is ideal for

an internal marketing study.

3.1.5 Sampling method: - “A sample consists of all units of the population that

are drawn for questionnaires” (Dillman, 2000, p. 126) and the population refer to

the people in the organization for whom you may generalize the results. Two

major types of sampling exist: probability and non-probability. Probability

sampling generates a sample through chance, while non-probability sampling is

not created through chance (Ary et al., 2002).

This study used probability sampling and the four most common types include:

(1) simple random sampling, (2) stratified sampling, (3) cluster sampling, and (4)

systematic sampling (Ary et al., 2002).

Simple random sampling: - allows everyone in a population the equal chance to

be selected. This is often accomplished through the assignment of identification

numbers to each member of a population and the use of a table of random

numbers to select the subjects. Stratified sampling is used when various


78

subgroups exist and it is believed that various groups will provide different

responses. The division of groups may be accomplished through any

characteristics and randomly selected independent samples develop from each

stratum. Cluster sampling allows a researcher to examine a group not simply

individuals. People are placed into groups based upon similar characteristics and

the clusters are randomly selected, then all members of the cluster are

examined. Systematic sampling allows a researcher to examine every Kth case

from a population where the first number is selected randomly (Ary et al., 2002).

Stratified random sampling: - The present study utilized a stratified sampling

approach based upon involvement within the organization (management, front-

line employee, external customer). This sampling approach allows the researcher

to examine various subgroups, the use of this method recommends equal

sample sizes but, “when the population to be sampled is not homogenous but

consists of several subgroups, stratified simple random sampling may give a

more representative sample than simple random sampling” (Ary et al., 2002, p.

167). The reasoning for the three strata (management, front-line employees, and

external customers) developed from the review of literature. The implementation

of internal marketing requires the support of management (Crosby & Johnson,

2003) and for knowledge exchange patterns to exist this process must begin at

the top of the organization (Ballantyne, 2003). Management attempts to treat

employees as both a client and customer of the product (Novatorov et al., 1998),

with the most important interaction occurring between front-line employees and


79

external customers (Iacobucci & Nordhielm, 2000). Therefore, to ensure proper

representation of each group a stratified sampling technique was utilized.

Management: - Management consists of full-time members of the organization

who train, provides direction, open lines of communication, and market the

products offered by the organization to front-line employees. Management within

Kasapa Telecom exists within many different hierarchical levels. Currently, there

are 17 full-time employees that represent management lead by the Managing

Director who reports to the mother company Hutchison International in Hong

Kong. The second level consists of 4 senior officers who overlook departments

and functions. The third is the Departmental managers numbering 11 tasked with

managing the various departments like handsets, marketing, Human resource,

customer service, sales Legal, IT and Finance. The fourth level is senior officers

and Customer Service Point supervisors who hold specific jobs within each

department. The final level of management is labeled “support staff” and consists

of administrative assistants in specific departments. Each has specific

responsibilities and the years of experience range from less than one year to

over 10 years (Some from the Celltell days). A sample size of 40 was therefore

used to represent the entire population of management for this study.

Staff (Front-line employees): - The staff consists of Graduate Administrative

Assistants and student employees on national service. Student employees hold

their positions for one year as it is mandatory according to their service


80

stipulation by the state and could be employed permanently after the service

based on performance. Each is expected to work an average of Forty-eight hours

per week with overtime. Student employees hold various titles including assistant

supervisors, officials, Assistant, and office workers. While each role in each

program area is different, a hierarchy exists. Office assistants may be promoted

to supervisor in the Customer Service Points. The population for this study was

60. The company holds a database on all external customers and there is a

weekly continuous customer satisfaction survey. The purpose of internal

marketing is to increase external marketplace performance in the long-run

(Ahmed et al., 2002; Ballantyne et al., 1995; Lings, 1999; Mudie, 2003; Varey &

Lewis, 1999). The researchers hypothesize that if internal marketing is effectively

implemented, the employee becomes satisfied and the positive behavior is

transferred to the external customer (Ahmed & Rafiq, 2003; Prasad & Steffes,

2002; Rafiq & Ahmed, 2000). 300 walk in customers also completed the

satisfaction forms.

Customers:- This consist of all Kasapa subscribers, existing and new

subscribers as they purchase either phones, top up cards, accessories,

complaints or general enquiries. A sample size of 300 was used for this study.

3.1.6 Instrumentation

3.1.7 Definition of Terms

Variables: - The purpose of a research project is to examine relationships

between independent and dependent variables. An independent variable is an


81

antecedent and presumed to influence the dependent variable (Ary et al., 2002;

Fraenkel & Wallen, 2000). A dependent variable is the outcome and believed to

be influenced by the independent variable(s) (Ary et al., 2002; Fraenkel &

Wallen, 2000). In order to understand how each variable was used in the study

they must be properly defined. In this study three independent (employee status,

involvement, internal marketing) and three dependent variables (internal

marketing, service quality, and feedback) exist.

Definitions of Terms: - In a study each variable must be properly defined and

two types of definitions exist: constitutive and operational. A constitutive definition

is, “the explanation of the meaning of a term by using other words to describe

what is meant” (Fraenkel & Wallen, 2000, p. 662), and this type of definition is

similar to what may be found in a dictionary (Ary et al., 2002). An operational

definition defines a term by stating the actions, processes, or operations used to

measure examples of it (Fraenkel & Wallen, 2000). This helps to clarify meaning

and terms that may be vague to others and allows the researcher to properly

measure the construct (Ary et al., 2002). The following section provides the

constitutive definitions for each variable.

3.1.8 Independent Variables

Employment Status: - In research question number one; the independent

variable is employment status (Management and Staff). In order to examine

perceptions of internal marketing it is necessary to examine the phenomenon


82

from both points of view to determine differences and similarities. Ballantyne

(2003) discussed that for internal marketing to exist, the product must be

marketed between the hierarchical levels, typically management and staff. The

management takes care of back office duties and staff performs most of their

work duties on the front-line, therefore, they hold direct interaction with external

customers (Lings, 1999). Internal marketing develops through communication to

remove barriers (Lings, 1999) and develops internal relationships (Ahmed &

Rafiq, 2003). When internal marketing exists, all employees utilize the product,

believe in the product, and ultimately improve external service quality (Lings,

1999).

Involvement: - The independent variable in research questions two and four is

involvement (Management and Staff). In question two, Gronroos (1982)

described how during a service, production and consumption are simultaneous,

therefore the staff assists in the creation of the product, and in

telecommunication service perceptions of service quality determines whether the

individual returns (Chelladurai et al., 1987). Therefore, differences in perceptions

of service quality may exist internally versus externally. In question four,

involvement acted as an independent variable to examine the importance of

feedback. Legare (1996) discussed the importance of feedback collection and

how face to face methods often provide better information. Finn et al. (1996)

added the feedback exists from both the external end user, but also from internal

customers who hold greater knowledge on the services provided.


83

Internal Marketing: - The independent variable for question three is the five

dimensions of internal marketing (employees, organization, external customer

satisfaction, external marketing techniques, and knowledge transfer). The focus

of internal marketing is to ultimately improve service quality. Since, in this

phenomenon employees are also viewed as customers (Berry, 1981),

perceptions of internal marketing should impact service quality.

3.1.9 Dependent Variables

Internal Marketing: - In research question one, internal marketing acts as the

dependent variable. It is a process where employees are viewed as customers

(Berry, 1981) and must be targeted through marketing type techniques to satisfy

needs (Gronroos, 1982). Internal marketing attempt affects the employees,

organizations, external customer and is influenced through communication.

Communication may be implemented through knowledge exchange patterns

which begin with the top of the organization and continue through external

customers (Ballantyne, 2003). Therefore, perceptions of internal marketing

between Management and staff employees are examined.

Service Quality: - The dependent variable in research questions two and three

is service quality. In question two, service quality is examined based upon level

of involvement. Gronroos (1994, p. 14) stated, “Without active and continuous

internal marketing efforts, the interactive marketing impact on customers will


84

deteriorate, service quality will suffer, and customers will defect” and encourages

the examination of differences in perceptions. In question three service quality is

examined versus the five dimensions of internal marketing. One outcome

identified through the literature review is a belief that as service quality

perceptions improve within employees, they become satisfied and improve their

treatment of external customers (Ahmed & Rafiq, 2003). If the employee provides

better service, then the perceived service quality of external customers is

expected to improve. Therefore, the perceptions of service quality internally

impact the perceptions externally and are a result of internal marketing. The

current study attempts to examine if internal marketing impacts internal

perceptions of service quality, and is examined through a partial replication of the

Ko (2000) instrument.

Feedback: - Feedback is discussed within internal marketing literature as a

method for employees to interact and an external marketing technique to build

relations amongst all internal and external members of an organization. This is

seen as an important method to improve service quality and a method to retain

customers. Feedback is developed through how it is collected, if it sought by the

organization, whether the individual provides it, how important customers feel

their feedback is, and this influences whether the process results in change

(Legare, 1996).


85

3.1.10 Demographic Variables

The instruments also obtained additional demographic information. Three

variables were tested on both instruments and included: (1) gender (2) Level of

Management (3) Years of experience with the company. Also, within each

instrument, additional demographic items were included. The level of

management instrument utilized three dimensions namely, (1) Top level

management (2) Middle level management and (3) Low level management). The

years of experience was also ranked (1) Less than one year, (2) Between 2 and

5 years (3) Between 6 and 10 years and (4) 10 years and above.

3.1.11 Scale Instruments

The instrumentation for this study involves both previously tested questions and

items developed through a review of literature. The use of a previously

developed instrument was recommended by Fraenkel and Wallen (2000, p. 130)

who stated, “Selection of an already developed instrument when appropriate ... is

preferred.”

Internal Marketing

The internal marketing instrument was created through a review of literature and

consists of five dimensions: employees, organization, external customer

satisfaction, external marketing techniques and knowledge transfer. The five

dimensions were created through their repeated appearance in definitions

provided in the review of literature. The items for internal marketing appear in

Section 1 of the survey instrument (Appendix A) and represent these five


86

dimensions. The effects of employees must exist because the focus of internal

marketing is to alter their perceptions of service quality (items 3, 20, 21, 22,). The

organization anticipates improved success through internal marketing (items 4, 5,

18, 19, 20, 25). External customer satisfaction is an outcome variable developed

because if the internal marketing efforts fail to effect the primary customer the

internal marketing program is deemed ineffective (items 2, 6, 8, 9). External

marketing techniques attempt to sell the product internally (items 7, 10, 11, 12,

13, 14). Knowledge transfer is a method to improve communication and removes

departmental barriers (items 15, 16, 17, 18, 19).

Service Quality

These dimensions represent specific sub-dimensions from the SSQPS scale.

Service information examines the ease of various methods in obtaining

information from Kasapa Telecom department (items 1, 2, 3, 4). Interaction

quality (IQ) involves how employees interact, handle problems, and assist

departmental customers (items 5, 6, 7, 8) Valence includes the customer

perceptions of feelings after a service managed by Kasapa Telecom department

(items 8, 9). The items for service quality appear in Section 2 (Appendix A) of the

survey instrument.

Feedback

Feedback was created through a review of literature. Questions (10, 11, 12, 13,

and 14) address the importance of feedback. Legare (1996) discussed not only

the collection of feedback but also the importance of acting upon the information

gathered to ensure customers the information is not falling upon “deaf ears”. The


87

actions that result from feedback must be continuous due to the continual change

in needs of customers. The items appear in the latter part of Section 2 of the

survey instrument (Appendix A) and it consists of five items.

Two survey instruments

Two survey instruments were created for this study: This was applied to both

management and staff (Appendix A). The employee instrument consists of three

sections: internal marketing, service quality & feedback, and demographics. All of

the items in the internal marketing, service quality, and feedback sections utilize

seven-point Likert type scales that range from strongly disagree to strongly

agree. The demographic section contains different responses for each item. The

customer satisfaction survey (Appendix B) contained sections on demographics

and satisfaction stances.

3.1.12 Scale Development

The instrument for the study involves both items previously examined and new

items developed from a review of literature, therefore validity and reliability must

be examined. The ability to address these issues reduces alternative

explanations, generalizations, and consistency in measurement.

Internal validity

Internal validity is defined as “the extent to which the changes observed in a

dependent variable are, in fact, caused by the independent variable(s)” (Ary et

al., 2002), and therefore extraneous variables must be controlled. The ability to

control these variables reduces the number of alternative explanations. The use


88

of a one shot case study to examine the framework in this study has no scientific

value according to Campbell and Stanley (1963), but they recognized at the time

how use of this technique was growing to create comparisons. Four threats to

internal validity that exist in this study are history, maturation, selection, and

mortality. Campbell and Stanley (1963) list history due to the events taking place

at the time of the study and maturation due to the passage of time. Selection is

an issue due to bias which occurs through the use of convenient samples and

the need for volunteers, while mortality exists due to non-respondents. In order to

handle these threats specific ideas are suggested by Fraenkel and Wallen

(2000). They suggest standardizing the conditions in which the study occurs,

obtaining more information on subjects, and obtaining more study details to

decrease the effects of mortality and history, therefore a greater amount of

background information must be collected and details of how they were tested

must be controlled and reported.

External Validity

External validity is defined as “the extent to which the results of a study can be

generalized” (Fraenkel & Wallen, 2000, p. 119). In this research project a case

study, random sample, and a convenient sample were utilized. The case study

limits the results to Kasapa Telecom Limited; the random sample of staff allows

generalizations to all staff. In order to make the results more generalizable,

similar case studies must be conducted on other telecommunication companies

in order to compare and contrast results. In order to increase generalizability of

the convenience sample, the individuals examined must be representative of the


89

population through relevant variables, but with this methodology success is never

guaranteed. Replication is suggested when the convenient sampling is the only

reasonable option under different conditions and groups of subjects (Fraenkel &

Wallen, 2000). One other threat to external validity is experimenter effects (Ary et

al., 2002). As a Marketing Officer in Kasapa Telecom numerous colleagues and

friends are still members of the organization. This may result in conscious and

unconscious cues that may influence answers and create abnormal behavior

amongst members who recognize my name and association with the company.

In order to address this issue, the researcher avoided conversation about the

topic of his dissertation.

Pilot Test

A field-test was administered to further strengthen face and content.

Questionnaires were personally distributed. A pilot was organized with a

representative of my target respondent which I asked them not just to fill-out the

questionnaire, but to provide comments and suggestions regarding content,

wording, format, clarity, focus, ease of use, and appropriateness of individual

items as well as for the instrument as a whole. They were also directed to review

the questionnaire for clarity in directions and to state which of the two survey

formats they preferred. Results demonstrated a need to omit a question in the

section 3 on demographic to promote the anonymity of respondents.

Reliability procedures

Reliability is “the degree of consistency with which it measures whatever it is

measuring” (Ary et al., 2002, p. 249) and is essential to instruments utilized in a


90

study. Consistency is determined through reliability coefficients of which three

exist: (1) test-retest, (2) alternate-form, and (3) internal-consistency (Ary et al.,

2002). In the current study the internal consistency coefficients were utilized to

determine relationships “among scores derived from individual items or subsets

of items within a test” (Ary et al., 2002, p. 254). A Cronbach’s alpha was used to

determine the homogeneity of the measures utilized and is typically used with

Likert-type scales. The test measures the variance of all the scores for each item

and sums these variances across all items (Ary et al., 2002).

3.1.13 Data Collection Procedures

3.1.14 Approval

Prior to the collection of any data, permission was granted by Dr Edwin Varo of

Irish International University. A verbal permission was also granted from the

Human Resource department of Kasapa Telecom Limited to perform the case

study on the company. Upon approval, the collection of data from managers and

staff was obtained.

3.1.15 Implementation

In order to receive the highest response I made several personal and telephone

contacts with respondents before finally administering the questionnaire. I

personally administered the questionnaires and made follow-ups till they were

completed and collected in 3 weeks.


91

3.1.16 Data Analysis Procedures

The data for the entire study was inputted into the Statistical Package for Social

Sciences (SPSS) 14.0 program for Windows to interpret results. Descriptive

statistics were generated for the variables of interest, and a second reliability

analysis on the instruments was conducted to ensure the items properly

represent each dimension. The five research questions were examined through

various data analysis procedures and are individually discussed in further detail.

3.1.17 Research Question #1: What is the relationship between employee status

(Management and staff) and perceptions of internal marketing?

Research question number one examines employment status (Management and

Staff) and the five dimensions of internal marketing (employees, organization,

external marketing techniques, external customer satisfaction, and knowledge

transfer). The middle and high level management employees represent

management and the low level employees represent staff. In order to examine

perceptions of internal marketing it is necessary to examine the phenomenon

from both points of view to determine differences and similarities. When internal

marketing exists, employees utilize the product, believe in the product, and

ultimately improve external service quality (Lings, 1999). In order to assess the

relationship the respondent cross tabulation statistics were conducted. This

statistics allow for the examination of multiple independent variables on two or

more dependent variables. The results demonstrate the interrelationships and


92

differences within the dependent variables based upon group differences (Hair et

al., 1998).

3.1.18 Research Question #2: How do perceptions of service quality differ

between Management and Staff?

Research question two examines the perceptions of service quality (program

instruction, interaction quality, and valence) with the level of involvement

(Management and Staff). Service quality determines whether an individual

returns (Chelladurai et al., 1987) and Gronroos (1994, p. 14) stated, “Without

active and continuous internal marketing efforts the interactive marketing impact

on customers will deteriorate, service quality will suffer and customers will defect”

and encourages the examination of differences in perceptions. Differences in

perceptions of service quality may exist internally versus externally where the

employees believe strong service quality is provided, yet external perceptions

differ. A t-test, total score of service quality as the dependent variable analysis is

used to examine difference in perception of service quality between management

and staff.

3.1.19 Research Question #3: How do employee perceptions of internal

marketing impact service quality?

Research question three examines the perceptions of internal marketing

(employee, organization, external customer satisfaction, external service quality,

and knowledge transfer) on service quality (program information, interaction


93

quality, and valence). The goal of internal marketing is to improve service quality.

Berry (1981) described employee as customers; therefore, perceptions of internal

marketing should impact service quality. Their satisfaction may improve the

treatment of external customers and increase levels of external perceptions of

service quality. A Correlation matrix is used for the statistical analysis for

relationship between dimensions of both variables. As well as correlation

between total score of internal marketing and service quality.

3.1.20 Research Question #4: How do perceptions of feedback differ between

Management and Staff?

Research question four examines the perception of feedback for management

and staff with the two dimensions of feedback (importance and collection). Finn

et al. (1996) stated feedback exists internally and externally. Often organizations

overlook internal feedback from individuals who hold greater knowledge on the

services provided and simply focus externally. The implementation of feedback

methods encourages interaction between employees and external customers

and fosters the development of relationships. This is seen as an important

method to improve service quality and a method to retain customers. The

methodology to examine research question four is the same as questions one

and two. For research question 4, the statistical analysis as research question 2,

t-test, total score of feedback as dependent variable was used.


94

3.1.21 Research Question #5: How internal communication impact on internal

marketing and service quality?

Research question five examines internal communication impact on internal

marketing and service quality. Often organizations overlook internal

communications from individuals who hold greater knowledge on the services

provided and simply focus externally. The implementation good communication

systems encourage interaction between employees and external customers and

foster the development of relationships. This is seen as an important method to

improve service quality and a method to retain customers. The methodology to

examine research question five is same as question three which is a correlation

matrix between total score of internal marketing and service quality.

3.1.22 Customer Satisfaction Survey

Finally the customer satisfaction survey was analyzed by the use of spreadsheet

assessing the impact of internal marketing and service quality on external

customer’s satisfaction. This covered specific services and products offered by

Kasapa Telecom.


95

CHAPTER 4

FINDINGS AND ANALYSIS

This chapter examines the data collected for the study. It is divided into eight

sections: (1) further reliability tests to examine the scales used in the study, (2)

examination of respondents, (3) demographic information, (4) data analysis for

research question one, (5) data analysis for research question two, (6) data

analysis for research question three, and (7) data analysis for research question

four (8) data analysis for research question five (9) Data analysis for customer

satisfaction instrument.

4.1.1 Reliability

In order to ensure reliability further statistical analysis was implemented to

examine the internal consistency of the instrument utilized. In order to ensure

consistency reliability tests were conducted on: (a) the responses from

management, (b) the responses from staff, and (c) a combined analysis were

conducted on staff and management.

4.1.2 Examination of Respondents

4.1.3 Response Rates

A total of 100 employee surveys (40 management and 60 front-line employees)

were distributed personally. Some questionnaires have to be sent back to

respondent for completion of parts which were omitted.


96

Crosstab

Count

26 20 46

14 40 54

40 60 100

male

female

Sex of respondent

Total

management other staff

Type of respondent

Total

Symmetric Measures

.311 .095 3.239 .001

.311 .095 3.242 .002c

.311 .095 3.242 .002c

100

Kendall's tau-b

Spearman Correlation

Ordinal by

Ordinal

Pearson's RInterval by Interval

N of Valid Cases

Value

Asymp.

Std. Errora

Approx. Tb

Approx. Sig.

Not assuming the null hypothesis.a.

Using the asymptotic standard error assuming the null hypothesis.b.

Based on normal approximation.c.

Sex of respondent

femalemale

Co

un

t

50

40

30

20

10

Type of respondent

management

other staff

Table 4.1 Response rates


97

4.1.4 Descriptive Statistics

Management

Descriptive statistics were divided into two levels: Management and Staff. The

statistics for Management (n=40) are located in Table 4.1. The sample was

comprised of 26 males and 14 Females.

Staff

The statistics for participants (n=60) are located in Table 4.1. The sample

consisted of 20 males, 40 females.

4.2.1 Research Question #1

Research question number one examined the relationship between employee

status and perceptions of internal marketing through crosstabulation statistics. It

was established that 75% management believes in the existence of internal

marketing as compared to 76.7% staff.

Type of respondent * My organization believes in internal marketing Crosstabulation

10 30 40

25.0% 75.0% 100.0%

14 46 60

23.3% 76.7% 100.0%

24 76 100

24.0% 76.0% 100.0%

StatisticsCount

% within Type

of respondent

Count

% within Type

of respondent

Count

% within Type

of respondent

Type of respondentmanagement

other staff

Type of respondent

Total

Negative Positive

My organization

believes in internal

marketing

Total

4.2 Crosstabulation on employee status and internal marketing perception


98

Chi-Square Tests

.037b 1 .848

.000 1 1.000

.036 1 .849

.036 1 .849

100

Pearson Chi-Square

Continuity Correction a

Likelihood Ratio

Linear-by-Linear

Association

N of Valid Cases

Value df

Asymp. Sig.

(2-sided)

Computed only for a 2x2 tablea.

0 cells (.0%) have expected count less than 5. The

minimum expected count is 9.60.

b.

4.3 Chi-square for research question 1.

The Significant probability (Pearson Chi-Square) for the above test is 0.848

which is far greater than the significant level of 0.05; therefore we conclude

based on the results of the analysis that there is no significant relationship

between Employee Status (Management and Staff) and perceptions of internal

marketing. Meaning that, the perceptions of internal marketing by the employees

does not depend on their employment status.


Research question two examined the differences in perceptions of service quality

Differ between management and Staff. Here we shall compare the mean

perceptions of service quality between Management and Staff. The Independent

Samples T Test is appropriately used for this analysis since we seek to compare

the means of two non-overlapping groups.


99

Independent Samples T Test

α P-value df Mean

(Management)

Mean

(Staff)

Std. Dev

(Management)

Std. Dev

(Staff)

0.05 0.014 98 4.73 2.95 1.339 1.648

4.4 Independent Samples T Test on perceptions of service quality

From table above, the p-value of the test is less than the 0.05 significance level,

that is, p˂ 0.05, therefore we conclude based on the result of the analysis that

the management’s perception of service quality is significantly different from the

perception the staff on service quality. The mean service quality perception of the

management is approximately 5, which is agree somewhat while the staff mean

service quality is approximately 3, which is disagree somewhat. This means that,

while management has a positive perception of their service quality, the staff also

has a rather negative perception of their service quality.


A correlation analysis was conducted to determine how employee perceptions of

internal marketing impact service quality were influenced by aspects of internal

marketing. Internal marketing consisted of five factors: employee, organization,

external customer satisfaction, external marketing techniques, and knowledge

transfer, and were utilized to assess the effects on the three factors of service

quality: service information, interaction quality, and valence. All of these were

derived from the employee’s scores on the survey.


100

Correlations

1.000 .235* .006 .203* .317**

. .019 .955 .043 .001

100 100 100 100 100

.235* 1.000 .026 .047 .287**

.019 . .800 .641 .004

100 100 100 100 100

.006 .026 1.000 .542** .406**

.955 .800 . .000 .000

100 100 100 100 100

.203* .047 .542** 1.000 .357**

.043 .641 .000 . .000

100 100 100 100 100

.317** .287** .406** .357** 1.000

.001 .004 .000 .000 .

100 100 100 100 100

N

N

N

N

N

My organization believes

in internal marketing

My organization serves

its employees the same

as it serves external

customers

I truely believe in the

products/ services

KASAPA sells

I feel good about working

for KASAPA because I

believe in its products

and servicesKASAPA makes

employees aware of the

quality of their products

and services

Spearman's rho

My

organizatio

n believes

in internal

marketing

My

organizati

on serves

its

employee

s the

same as it

serves

external

customers

I truely

believe in

the

products/

services

KASAPA

sells

I feel good

about

working for

KASAPA

because I

believe in

its

products

and

services

KASAPA

makes

employees

aware of

the quality

of their

products

and

services

Correlation is significant at the 0.05 level (2-tailed).*.

Correlation is significant at the 0.01 level (2-tailed).**.

The table above shows that employee perception of internal marketing has a

positive impact on service quality. The impact is stronger in the case of those

with double asterisks.


101

Correlations

1 .221*

. .036

100 100

.221* 1

.036 .

100 100

StatisticsPearson Correlation

P-value

Sample size

Pearson Correlation

P-value

Sample size

Internal marketing

(Total score)

Service quality

(Total score)

Internal

marketing

(Total score)

Service

quality

(Total

score)

Correlation is significant at the 0.05 level (2-tailed).*.

4.5 Correlations on employees’ perception

The table above shows correlation between total score of internal marketing and

service quality. It is observed from the table that, there is a significant positive

correlation between internal marketing and service quality at a 5% significance

level. This means that, employee perceptions of internal marketing have a

positive impact on service quality.


Research question four examined the differences in perceptions on feedback

amongst Management and Staff. Here we shall compare the mean perceptions

of feedback between Management and Staff. The Independent Samples T Test

is appropriately used for this analysis since we seek to compare the means of

two non-overlapping groups.

.


102

Independent Samples T Test

α P-value df Mean

(Management)

Mean

(Staff)

Std. Dev

(Management)

Std. Dev

(Staff)

0.05 0.344 98 2.85 3.20 1.442 2.007

4.6 Independent Samples T Test on perceptions of feedback

From table above, the p-value of the test is greater than the 0.05 significance

level, that is, p˂ 0.05, therefore we conclude based on the result of the analysis

that the management’s perception of service feedback is not significantly

different from the perception the staff on feedback. The mean perception

feedback of the management is approximately 3, which is disagree somewhat

while the staff mean perception of feedback is also approximately 3, which is

disagree somewhat. This means that, both management and staff have a rather

negative perception of the delivery of feedbacks from the various departments.

4.2.5 Research Question # 5

Correlation Matrix on how internal communication impact on internal marketing

and service quality


103

Correlations

1.000 .197* .317**

. .049 .001

100 100 100

.197* 1.000 .356**

.049 . .000

100 100 100

.317** .356** 1.000

.001 .000 .

100 100 100

StatisticsCorrelation

Coefficient

P-value

Sample size

Correlation

Coefficient

P-value

Sample size

Correlation

Coefficient

P-value

Sample size

Variables1My organization believes

in internal marketing

Information is exchanged

across departments in

order to address

customer needs

KASAPA makes

employees aware of the

quality of their products

and services

TypeSpearman's rho

My

organization

believes in

internal

marketing

Information is

exchanged

across

departments

in order to

address

customer

needs

KASAPA

makes

employees

aware of the

quality of their

products and

services

Correlation is significant at the .05 level (2-tailed).*.

Correlation is significant at the .01 level (2-tailed).**.

4.7 Correlations on Internal communication impact

The table above shows that internal communication has a positive impact on

internal marketing and service quality. However, it has a stronger direct impact

on service quality than internal marketing.


104

4.3 CUSTOMER SATISFACTION ANALYSIS

Customer Satisfaction Ratings of Kasapa

Ratings Outcome

Excellent 36%

Good 46%

Average 12%

Fair 4%

Poor 2%

0%

5%

10%

15%

20%

25%

30%

35%

40%

45%

50%

Outcome

Excellent

Good

Average

Fair

Poor

5.0 Customer satisfaction ratings of Kasapa Telecom services


105

Satisfaction with time spent at the CSP

Satisfaction level Outcome

Very Satisfied 21%

Satisfied 60%

Not Sure 8%

Dissatisfied 11%

0%

10%

20%

30%

40%

50%

60%

Outcome

Very Satisfied

Satisfied

Not Sure

Dissatisfied

5.1 Satisfaction with time spent at the CSP Ratings

What customers likes about Kasapa’s Services

Likes Outcome

Clear/ Efficient 21%

Low tariffs 28%

Affordable Handsets 6%

No Expiry Date 3%

Free Night Calls 16%

Kasapa Dash 5%

Good Service 6%

Voice mail /Text message 1%

Efficient Customer Care 3%

Everything about Kasapa 4%

Clear reception 3%

Ring back tone 1%

Kasapa Bounce 3%


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5.2 What customers dislikes about Kasapa

Dislikes Outcome

Limited coverage area 13%

Reception 14%

Kasapa ring back tone 2%

Less customer service centers 1%

Battery life 9%

Slow Response 2%

Repair charges high 1%

Too Local 1%

Network goes off at times 2%

Sound made by phone when switched off 1%

Customer Care 1%

Handsets are not sophisticated enough 1%

Voicemail 21%

Phone screens 1%

Phone Lifespan/Quality 17%

Expensive to make calls 1%

Lack of phone accessories 5%

Call rate to other networks is expensive 1%

Cannot use other chips/Handsets 2%

Reduce prices of Camera phones 1%

Difficulty in sending TXT message 1%

Difficulty in reloading 1%

Durability of chargers 1%


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5.3 Suggestions by customers for improved service quality

Suggestions Outcome

Expand Office/Coverage 40%

Improve Service 14%

Change the name 1%

Customer Care (Training) 1%

Provide quality phones 17%

Reduce call rate 2%

More Accessories 1%

Quality Battery/Charger 9%

Phones that can use other chips 3%

Introduce Internet service 3%

Make voicemail optional 3%

Dash more credits 1%

Reduce prices of phone parts 1%

Sell transfer machines 1%

Provide tables and umbrellas 3%

4.3.1SUMMARY OF CUSTOMER FINDINGS

• 43% of the respondents were self employed.

• A significant proportion (61%) of the respondents was aged (18 – 30).

• Respondents visited our CSPs mainly to report problems - (48%).

• Specific problems reported were handsets related - (49%).


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• A substantial proportion of the respondents were satisfied with the time

spent at the CSP-(60%).

• 83% of the respondents were satisfied with our tariffs and 46% rated our

services to be good.

• Quite an appreciable proportion of our respondents were aware of Kasapa

bounce (51%) but 76% of the same respondents had never used it before.

• Respondents who topped up weekly constituted 34% of the total.

• Most preferred network aside Kasapa is Areeba (23%) but 47% of the

respondents were Kasapa loyalists. This makes Areeba our major

competitor among the other competitors.

• 67% of the respondents interviewed had never received a Kasapa dash.

• 28% of the respondents liked our low tariffs. However 17% of them were

unhappy with the quality of our handsets.

• Finally, a significant proportion (40%) of the respondents suggested we

should expand our coverage area


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CHAPTER 5

DISCUSSION, CONCUSION AND RECOMMENDATIONS

The purpose of the study was: (1) To examine the relationships between

employee status (Management and staff) and perceptions of internal marketing,

(2) To examine the impact of internal marketing and service quality on internal

and external customer satisfaction in Kasapa Telecom (3) To establish the

impact of internal communication on internal marketing and service quality in

Kasapa Telecom, (4) To assess employee perceptions on internal marketing and

service quality (5) To examine how perceptions of feedback differ within

management, front-line employees, and the customers of Kasapa Telecom. The

remainder of this chapter discusses these purposes and is divided into six

sections: (1) discussion, (2) implications, (3) limitations, (4) conclusion, (5)

recommendations and (6) future research.

5.1 Discussion on Findings

Results of the current study provide unique insight into the effects of internal

marketing on perceptions of service quality. Early research on internal marketing

demonstrated how employees have similar needs to external customers (Berry,

1981), and this created the foundation for internal marketing. Since this time,

researchers have attempted to develop the concept. While Foreman and Money

(1995) conducted the first empirical test and believed their results demonstrated

internal marketing was simply good resource management, the findings suggest


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internal marketing may exist in this setting but fail to positively influence external

service quality. Research question one examined perceptions of internal

marketing based upon employee status, and results demonstrated the

significance.

Ballantyne (2003) suggested internal marketing begins with the top executives

and filters through the hierarchical chain to all employees, and this provided the

foundation for this question. Though to date, research on internal marketing

failed to examine differences in perceptions between management and staff. The

scores of 75% for management and 76.7% for staff for the presence of internal

marketing were not significantly different for employee levels. This result is

unique from an internal marketing perspective where management must “woo”

(Berry, 1981) staff. Ballantyne (2003) promotes the notion management hold

higher perceptions that must be marketed down through the hierarchical chain.

The results indicate internal marketing exists since the staff holds a higher

perception within all the levels of the dependent variable. This result differs

marginally from Ballantyne’s perspective.

The examination of question two demonstrates the importance of examining both

management and staff when studying employee perception of internal marketing

and service quality. Previous research determined that internal marketing

impacts external service quality (Lings & Brooks, 1998; Prasad & Steffes, 2002)

though this was not the case in this study. The mean service quality perception of


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the management is approximately 5, which is agree somewhat while the staff

mean service quality is approximately 3, which is disagree somewhat. This

means that, while management has a positive perception of their service quality,

the staff also has a rather negative perception of Kasapa service quality. In terms

of internal marketing, there is no significance between levels of involvement in

the organization. This demonstrates that management thinks higher of their

service quality than the staff. However staff delivers service quality to customers

as customer’s satisfaction score is 60%.

An explanation of this outcome was found from Fram and McCarthy (2003, p.

27), who created the idea, product blind, where employees hold a higher view of

their product in comparison to external perceptions. This creates a mentality

where employees feel a reduced need to improve products. It is conceivable that

employees may be “service blind” and believe they provide satisfactory customer

service. If an organizational member is both a customer and employee as Berry

(1981) suggested, then one possible negative outcome of internal marketing may

be the concept “service blind”. This may result where an organizational member

is satisfied as a customer, believes high levels of service quality are provided

externally, yet external customers fail to hold similar perceptions. Schlesinger

and Zornitsky (1991) discussed a similar idea to “service blind” in their

examination of the insurance industry. The authors conducted qualitative

research of both employees and customers to determine differences in

perceptions. They discovered, “thinking that you are offering the right type of


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service is not sufficient to provide quality service, you must also be in touch with

the customer” (Schlesinger & Zornitsky, 1991, p. 142). Employees often believe

they provide adequate service but fail to adequately seek feedback from

customers. Therefore, the organization actually provides sub-par service.

Feedback allows employees to adjust behaviors and actions to meet customer

needs. To date previous research on service quality within internal marketing has

failed to discover similar results. The reason for this may be explained by the

limited research on internal marketing that examines service quality perceptions

of both employees and customers. While Lings and Brooks (1998) found a

significant link between internal service quality and external service quality, the

study focused on internal suppliers and not employees of a specific organization.

The remainder of the empirical studies on internal marketing focused solely on

internal perceptions.

The findings of research question three established that both Management and

employees believes employee perception on internal marketing has a positive

impact on service quality. This confirms the views on of Lings and Brooks (1998).

Research question four is the attempt to examine feedback’s relationship to

internal marketing. The current study examined feedback through level of

involvement within the organization and significance was discovered.

Management tests revealed the no significant difference existed between


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Management and Staff. The results from participants displayed a good

perception of feedback.

Research question five attempted to re-emphasize the impact of internal

communication on internal marketing and service quality and this was reaffirmed

through responses that effective communication flow from management to staff

and vice versa is a prerequisite for internal marketing and service quality.

Examination of the mean scores from management provide a positive picture, but

this may be a result of their ability to voice complaints at meetings, the use of an

Intranet (Outlook) or simply resolve any issue that develops during their

participation through previously developed relationships. Harari (1993) warned

that internal customer models distract employees from focusing on external

customers and criticisms of internal marketing revolve around the failure

recognize the needs of external customers (Lings & Brooks, 1998). Shank (1999)

stated feedback allows organizations to properly address perceived problems

and meet customer needs. The failure to seek this information limits an

organizations ability to adapt to the environment and may limit their ability to

secure resources (Chelladurai, 2001). The results demonstrate the importance of

balancing both an internal and external focus. If “service blind” is a possible

negative outcome of internal marketing that results from an organizations

overestimation of service quality provided, effective collection of feedback may

reduce the development of “service blindness”. While internal marketing failed to


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significantly influence external service quality for staff, it drastically effected

internal perceptions of service quality as examined in research question three.

Foreman and Money (1995, p. 761) wrote, “internal marketing is necessary to

ensure that the organization attracts, selects and retains the best employees”

and they believe internal marketing directly impacts the level of service quality.

The current findings proved this thought.

The final dependent variable, valence was primarily affected by management and

staff with regard to communication. A common bond between these may be the

ability for employees to communicate with one another. Communication ensures

the wants and needs of employees are met and this is created through the

development of cross-functional units. The setting of this study provided a great

example of how communication in general improves perceptions of service

quality. The employees who may easily voice complaints are satisfied customers,

while this similar form of communication fails to exist externally. Therefore, while

all the aforementioned researchers discussed the importance of communication

in internal marketing, this study demonstrates their ideas. The results of the

entire study identify an organization where internal marketing may exist, but this

success has failed to convince staff that service quality is achieved. The findings

of this study are unique because “marketers today operate in an external

environment” (Amato & Amato, 2002, p.81), and previous research has

demonstrated that internal marketing improves external service quality (Lings &

Brooks, 1998; Prasad & Steffes, 2002), yet this study demonstrated a extended


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internal marketing focus that failed to effect partial internal and external service

quality. Overall, internal marketing may exemplify a services management

phenomenon. Schneider (2004) described services management as an

interdisciplinary approach that consisted of services marketing, services

operations management, and services human resources management.

Schneider (2004) reasoned that successful service organizations require a strong

knowledge of each area to understand and deliver service quality, though to date

in research, scholars in each area are unwilling to interact and share data.

Similar issues exist within internal marketing and this study. Research projects to

date operationalized internal marketing in a different manner in an attempt to

isolate the discipline in which it was examined. This study operationalized

internal marketing as a method to sell products to employees, Prasad and

Steffes (2002) believed internal marketing was the expense of motivating

employees to improve the efficiency of operations, and Novatorov et al. (1998)

utilized a human resource perspective that believed internal marketing included

wages, benefits, raises, awards, and job performance feedback. Each of these

three studies utilized a specific discipline as described by Schneider (2004) and

failed to utilize an interdisciplinary approach. The various operational definitions

of internal marketing were a weakness described by Ahmed and Rafiq (2003).

They believed internal marketing was difficult to operationalize and an easy to

visualize idea that was socially constructed. Therefore, internal marketing may

only be understood by relating it to a specific company to provide it meaning. For

example, in this study it is easy to visualize telecommunication environment


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where staff utilize a product, hold high perceptions of service quality, and as a

result create a strong service quality environment but this was not the case.

Ahmed and Rafiq (2003) stated that to properly implement internal marketing a

total managerial approach must exist followed by perfect coordination and

integration of internal marketing methods. They added that management must

also fully understand the concept, embrace it, and properly respect employees to

achieve effectiveness. The current study may represent an environment where

the employees truly believe in the product, but fail to convey these thoughts into

actions with external customers. As a result of the findings discussed, practical

implications also exist.

5.2 Implications

Overall, internal marketing may exist within the setting of this study, but the

internal techniques have failed to impact staff (frontline) customer’s perceptions

of service quality. This implies the possibility of high staff turnover for especially

frontline staff. However the results demonstrated 100% of all employees utilize

the product and services offered by the organization. Internal marketing

influences service quality. Upon utilizing the services, they interact with fellow

employees, and therefore may have positive feelings as to what the organization

offers to them. The other significant covariates (organization, external customer

satisfaction, and external marketing techniques) indicate the organization

encourages participation through marketing techniques and there is a belief this

influences external customer satisfaction. Therefore, high levels of service quality


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and feedback exist internally, but the results demonstrate similar techniques fail

to effectively exist in some functions within organizational boundaries. The

organization may need to improve their methods of contact and interaction with

frontline staff. Further, they may need to manage impressions after usage of

services. Employees should extend beyond departmental walls and create

relationships with customers through interaction. Prasad and Steffes (2002)

stated internal marketing must precede external marketing. If not, the

organization may offer a service it is unable to provide. In this study internal

marketing exists but limited and now must be enhanced throughout the

organization and externally. This starts through interaction, specifically face to

face feedback, which Legare (1996). It fosters the development of relationships

(Gronroos, 1984) which allows the service to end on a positive note (Morgan &

Rao, 2003). This creates trust and commitment (Anderson & Narus, 1998),

perceptions of quality are based upon customer involvement (Gronroos, 1982,

1984), and this determines whether they return (Chelladurai et al., 1987).

5.3 Limitations

Numerous limitations exist throughout this study that must be identified. These

limitations include the population size differences between Management and

Staff, threats to validity national service persons, internal perceptions of service

quality, the possible existence of multicollinearity, and the primary Head Office

where the study occurred. The limitations of this study are the ability to receive

enough feedback from a small number of full-time positions. This limitation exists


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in any study that involves perceptions from various hierarchical levels of an

organization due to differences in population sizes. In this study the population of

management was 40, while the population of staff was 60 and customer being

300. While confidentiality was assured in my preamble to the questionnaire, a

different belief may have existed within respondents that may influence the

results of this study. The service quality section of the internal instrument

attempted to identify impressions of service quality from an internal customer, not

employee perspective. While this idea was stressed in the survey instrument, the

possibility exists that confusion may have existed which influence the results of

this study.

Base upon the recommendations of Hair et al. (1998) and Tabachnick and Fidell

(2001), the possibility of multicollinearity exists; therefore the findings should be

interpreted with caution. In order to further validate the results of this study,

improve on the overlap of constructs, and address possible issues with

multicollinearity, follow-up studies must be conducted. Finally, the handsets

sourcing problem where the organization relied on re-furbished handsets

presented a blurred perception on the actual service quality of the organization.

Therefore, perceptions of attractive and functional facilities may vary amongst

respondents.

5.4 Conclusions

Internal marketing is not, of course, anything entirely new in a firm. Internal

programs to make employees committed to various goals have always existed.


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What is new is the active, market-oriented approach as suggested by the internal

marketing concept. Internal marketing influences internal perceptions of service

quality. The results of this study demonstrate internal marketing may currently

exist but internal and external perceptions of service quality for staff remains

lower than internal perceptions for management. This may demonstrate a

weakness of internal marketing where the perception is strong on both parts but

does not reflect in service quality for a part as established in the study on the part

of staff.

Current study illustrate that organizations can at least assess five dimensions of

service quality to ascertain the level of services provided, and to determine which

dimensions need improvement. In order to improve service quality, it is

necessary to contact employees regularly and assess their service experiences.

Like the external customer, an internal customer too considers categories of

service attributes, such as reliability and responsiveness, in judging the quality of

the internal service. With the knowledge of the internal service quality

dimensions, the service organizations can then judge how well the organization

or employees performed on each dimension and managers could identify the

weakness in order to make improvements.

In conclusion, knowing how customers perceive the service quality and being

able to measure service quality can benefit industry professionals in quantitative

and qualitative ways. The measurement of service quality can provide specific


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data that can be used in quality management; hence, service organizations

would be able to monitor and maintain quality service. Assessing service quality

and better understanding how various dimensions affect overall service quality

would enable organizations to efficiently design the service delivery process. By

identifying strengths and weaknesses pertaining to the dimensions of service

quality organizations can better allocate resources to provide better service and

ultimately better service to external customers.

5.5 Recommendations

1. Kasapa should establish systems to encourage two-way flow of

information especially from staff to management.

2. The organization should establish Key Performance Indicators (KPI) to

guide front line staff in the service delivery.

3. Meetings between staff and management should be increased to change

the perception of non-existence of service quality especially on the part of

staff.

4. Service quality is by the buyers perceived as the fulfillment of technical

specifications and around this there is the personal chemistry parallel to

economic issues. Working social relations is a must; one cannot

compensate this dimension with technology. Service quality must be

considered from a holistic perspective consisting of technology,

administration, security in deliveries and a working information flow.


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5. With responsiveness and assurance scoring low implies the need for staff

motivation to promote their willingness to help and provide prompt

services to customers. There is also the need for professionalism in all

customer service delivery to convey trust and confidence.

6. Service quality is an antecedent of consumer satisfaction and that

consumer satisfaction exerts a stronger influence on purchase intentions

than doe’s service quality. Thus managers may need to emphasize total

customer satisfaction programs over strategies catering solely on service

quality. Perhaps, consumers do not necessarily buy the highest quality

service; convenience, price, or availability may enhance satisfaction while

not actually affecting consumers’ perception of service quality.

7. In view of the role of experience in diminishing some types of perceived

risk, service marketers may need to adopt strategies which specifically

encourage consumer trial of the service product; such strategies imply the

need to offer services of an introductory nature, ideally at a reduced cost.

8. Because of consumer perception of higher variability associated with

services, a marketing mix strategy for services demands special attention

to increased product uniformity.

9. Service providers need to subtly yet consciously seek to manage

expectations in such a way that consumer expectancies will be consistent

with the delivered service quality

10. While SERQUAL can be used in its present form to assess and compare

service quality across a wide variety of firms or units within a firm,


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appropriate adaptation of the instrument may be desirable when only a

single service is investigated.

5.6 Future Research

The future direction of internal marketing requires further refinement of the

survey instrument, replication, and determination of how internal marketing may

be implemented within an organization. While the results of the data analysis

demonstrate internal marketing affects service quality, the internal marketing

items were created via a review of literature and reliability analysis fails to

demonstrate strong dimensions. In order to examine improvements to the

instrument, the study must be replicated in similar settings. The results of this

study are only generalizable to this setting, while significance was discovered, no

guarantee exists similar results will be found at other institutions. Also, previous

empirical research in this area failed to produce a replicated research method.

Future research should seek to examine the use of SERVQUAL to close other

service quality gaps for different types of organizations. Also, an important issue

for future research is about the relationship between internal service quality and

external customer satisfaction as well as other constructs, such as employee

service orientation, and external service quality.

Finally, if internal marketing truly affects service quality, methods for

implementation must be developed. While only one study, if upon replication


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similar results occur, a formalized process will be sought as a process to improve

internal marketing. While previous research has proposed methods, they typically

involve human resource not internal customer focus techniques, though as

discussed an interdisciplinary approach may be the most effective.

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5.8 Appendices 5.8.1 Final Internal Customer Instrument (Management & Staff)

QUESTIONNAIRE- (CONFIDENTIAL)

Please consider each question carefully to determine how you feel about the subject matter personally as a CUSTOMER OF YOUR ORGANISATION. This study is attempting to examine how employees feel as customers in Kasapa Telecom Limited. It is believed that if an organization is able to satisfy employee needs then they will likely deliver reliable service, which ultimately creates strong brand perceptions of quality, foster relationships, and creates customer satisfaction This information is required for academic purpose only and the accuracy of information provided will contribute immensely to the success of this research. All views expressed will remain confidential and shall be used for this exercise only. Section 1: Internal Marketing: This views employees as customers that require satisfaction of needs and wants while addressing the objectives of the organization. (Please circle your response) Strongly Disagree Disagree Neutral Agree Agree Strongly Disagree somewhat somewhat Agree 1 2 3 4 5 6 7 1. My organization believes in internal marketing. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 2. My personal needs are met through the products and services offered by Kasapa. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 3. My organization serves its employees the same as it serves external customers Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 4. My satisfaction as an internal customer improves my attitude as an employee. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 5. Kasapa markets its products and services to employees. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 6. Kasapa promotes the creation of customer relationships. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 7. Kasapa recognizes the employee as a customer of the organization. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 8. My attitude as an internal customer and employee of the Kasapa affects the satisfaction of external customers.


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Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 9. My satisfaction as an internal customer affects the satisfaction of other customers. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 10. Kasapa satisfies the needs of its customers. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 11. Kasapa operates attractive and functional products and services. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 12. Kasapa recognizes service failures (e.g. employees notice customer dissatisfaction and proactively approach the customer to improve the situation). Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 13. Kasapa addresses failures and contacts the customer to rectify the situation. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 14. Kasapa creates relationships with customers. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 15. Information is passed on from the top management down through to the external customers. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 16. Information is exchanged across departments in order to address customer needs. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 17. Information is naturally exchanged throughout the entire company due to common social and economic interests. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 18. Feedback form all departments are delivered in time Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 19. My direct supervisor encourages me to use the products and services Kasapa offers. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 20. I truly believe in the products/ services Kasapa sells. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 21. I feel good about working for Kasapa because I believe in its products and services.


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Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 22. Kasapa makes employees aware of the quality of their products and services. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree Section 2: Service Quality: The statements below concern your perception of Kasapa services and products. (Please circle your response) 1. Kasapa emphasizes service quality to all customers Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 2. Kasapa personnel are easy to contact by mail Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 3. Up –to-date information is available on Kasapa products and services Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 4. Overall, information about Kasapa is easy to obtain. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 5. Kasapa’s employees seem very knowledgeable about their job. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 6. Kasapa employees are willing to help individuals who patronize its products and services Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 7. Kasapa employees handle customer’s problems promptly and satisfactorily. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 8. Employees recognize and deal effectively with the special needs of each customer Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 9. I feel good about products and services I get from Kasapa Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 10. The organization believes it is important to provide feedback. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 11. The feedback I provide often results in changes.


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Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 12. The company continually seeks my feedback. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 13. I as a customer of the organization believe it is important to provide feedback Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree 14. The methods established by the organization to provide feedback are effective. Strongly Disagree 1 2 3 4 5 6 7 Strongly Agree Section 3: Demographic Details 1. Gender: Male Female 2. Which level of management do you belong to? Please tick

• Top level management 1

• Middle level Management 2

• Low level Management 3 3. How long have you worked in this company? Please tick

• Less than one year 1

• Between 2 and 5 years 2

• Between 6 and 10 years 3

• 10 years and above 4

Thank you very much for your time and assistance.


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5.8.2 Final Customer Instrument

CUSTOMER SATISFACTION SURVEY (QUESTIONNAIRE)

(Please be assured that the information you provide in this questionnaire would be confidential and would be used only for the purpose of this study)

SECTION (I) (Please tick where appropriate.)

Sex: M / F Age: Between (18 - 30) (30 -60) (Over 60) Occupation: _______________________ Place of work: __________________________ Where do you stay? _____________________ What is your Kasapa number? ____________ What do you use your Kasapa phone for? ¤ Personal ¤ Commercial / Business

SECTION (II) (Please tick where appropriate.)

1. Why did you contact customer service? (i) To buy a phone (ii) To buy an accessory (iii) Buy credit (iv) Make an enquiry (vi) Report a problem

2. If response to question (1) above was (vi), please specify the nature of the problem.

(i) Report of a stolen phone (ii) Problem with RUIM (chip) (iii) Problem with handset (iv) Problem with reception (v) other………………………………

3. Do you have reception problems?

YES NO

4. How satisfied were you with the time it took customer service to answer your question or solve your problem? ¤ Very satisfied ¤Satisfied ¤ Not sure ¤ Dissatisfied

5. Do you think the amount you pay for calls is fair considering the quality of service you get?

YES NO

6. How often do you experience problems when re-loading your account? ¤ Very Often ¤ Often ¤ Not Often ¤ Not at all

7. Overall, how would you rate Kasapa’s service? ¤ Excellent ¤Good ¤ Average ¤ Fair ¤ Poor


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8. Would you recommend Kasapa to a friend / relation? ¤ Very likely ¤Likely ¤Not sure ¤Unlikely

9. Apart from Accra and Tema, can you mention any other town that is covered by

Kasapa? …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

10. Have you ever received a Kasapa Dash before?

(i) YES (ii) NO

11. What do you like best about the services rendered by Kasapa? ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

12. What do you dislike about the services rendered by Kasapa? …………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………… 13. What would you like to see Kasapa improve on or change? ……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

THANK YOU


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5.8.3 Servqual Diagram

Documents

INTERNAL MARKETING AND SERVICE QUALITY IN KASAPA TELECOM- SOLOMON ADU ATEFOE