The traditional view about the marketing to improve corporate performances has been understood as an activity related to only external customers.
However, many service companies consider employees as their internal customers in concept of the customer. In addition, due to the change of the understanding about the customer, the importance of the internal marketing for employees has been expanding gradually.
It has been for 40 years that the internal marketing concept was introduced in the field of the service marketing research. It was an momentum for employees to understand the corporate values, employee commitment, customer satisfaction and loyalty through the internal marketing.
Importance of the internal marketing is on the rise due to various changes, like recent change of government policy surrounding public enterprises. Nevertheless a wide range of studies of the internal marketing about diverse organizations have been carried out so far, the study on the public enterprises has rarely been done.
This study analyzes the relationship between internal marketing and customer orientation, for the sustainable growth and customer orientation improvement of the public enterprises. In order to improve the customer orientation, also it aims to examine the internal marketing and organizational cultural dimension according to the characteristics of public enterprises.
The samples of this research have been surveyed by 604 employees in 21 public enterprises, based on Customer Satisfaction. The 21 public enterprises are divided to 4 types focused on ‘customer types’ that are used in the result of Public-Service Customer Satisfaction surveys and ‘self generating fund ratio in operation’ that is used to distinguish between Market-based SOEs(state-owned enterprise) and Quasi-market-based SOEs types in the 「Law on management of public institution」.
Based on the service internal marketing model of Rafiq and Ahmed(2000), here I would like to compare and analyze on how internal marketing affects customer orientation. The research model is set up among internal marketing, types of public enterprises, organizational culture and customer orientation. The study’s hypotheses were tested by the survey data collected from employees mentioned previously in the 21 public enterprises.
The results of this study are suggested as follows,
First, relationship between internal marketing and customer orientation by regression analysis, internal marketing is an important factor that have a positive impact on the customer orientation.
Second, relationship between internal marketing and customer orientation by regression analysis according to the types of public enterprises, compared to other types of public enterprises, typeⅢ(Market-based SOEs, corporation customer)’ internal marketing was the strongest influence on the customer orientation. The reason is that low level of the customer orientation and other factors except internal marketing had little effect on the customer orientation. On the other hand, typeⅣ(Market-based SOEs, individual customer)’ internal marketing was the weakest influence on the customer orientation. The reason is that high level of the customer orientation and other factors except hierarchy culture had little effect on the customer orientation.
Third, ANOVA(Analysis of Variance) and t-test was conducted to compare the mean differences depending on the characteristics of public enterprises. As the result, there was no significant difference in the level of customer orientation between Market-based SOEs and Quasi-market-based SOEs. But there was significant difference in the level of customer orientation between ‘individual customer’ types and ‘corporation customer’ types. ‘Individual customer’ types are higher than ‘corporation customer’ types in the level of customer orientation. 4 types of public enterprises have differences significantly in the level of customer orientation: typeⅣ(Market-based SOEs, Individual customer) has the highest scores, followed by typeⅡ(Quasi-market-based SOEs, Individual customer), typeⅠ(Quasi-market-based SOEs, corporation customer), typeⅢ(Market-based SOEs, corporation customer).
Lastly, the result of verifying the moderation effect of organizational culture is as follows; In typeⅠ, group culture and hierarchy culture have the moderation effect on the relationship between internal marketing and customer orientation. In addition, hierarchy culture has the negative moderation effect. But In typeⅡ, there has no moderation effect on the relationship between internal marketing and customer orientation. In typeⅢ, development culture and rational culture have the moderation effect on the relationship between internal marketing and customer orientation. In addition, rational culture has the negative moderation effect. In typeⅣ, development culture and rational culture have the moderation effect on the relationship between internal marketing and customer orientation. In addition, development culture has the negative moderation effect.
Through empirical results, there are differences in the degree of customer orientation among four types of public enterprises. The reason is that the difference of level and range to take advantage of the internal marketing and organizational culture for each public enterprise. Therefore, internal marketing and organizational culture dimension of the public enterprises should be built according to the characteristics of the public enterprises.
In order to create a substantive outcome of the organization, it needs to change the system into customer-oriented one not only the characteristics of public enterprises as of hardware but also the organizational culture as of software. Through the efforts, public enterprises can get competitive advantages.
The supported findings for the relationship between internal marketing and customer orientation give credence to the past literature that assumed the relationship, and hence this study contributes to the academic literature in this domain.