The Power of Internal Marketing - Research Paper Example

The Power of Internal Marketing Introduction Marketing is not a static or stagnant field of study; instead, since its inception, marketing has remained in a constant state of flux and change. Various macroenvironmental trends, industry forces, and market dynamics have affected it and in the process of the same; marketing has responded by adapting to various changes and taking many new forms. Holistic marketing, socially responsible marketing, social marketing, and internal marketing are the most prominent marketing trends that have emerged strongly during the past few decades (Dunmore, 2002; Varey and Lewis, 2000). Internal marketing, which is the focus of this paper, refers to the philosophy or approach where every member of the organization is onboard regarding the marketing strategies and activities and every member of the organization engage in the process of choosing, creating, delivering and communicating customer value (Boone and Kurtz, 2011; Varey and Lewis, 2000). Internal marketing dictates that excellent marketing departments, by no means, are the guarantee of extraordinary value creation for the customer. In fact, any organization, where employees point out at the marketing department by saying that “They do the marketing”, might not ever be able to realize its potential (Knudsen, 1995). Only when employees start understanding that the goal of achieving customer satisfaction, through value creation, is the job of all employees, the company becomes a pure market organization (Lauer, 2010; Boone and Kurtz, 2011). Consider the example of a Vice President of Marketing of an airline company. He has adopted a market penetration strategy and intends to do the same with cleaner cabins, lower fares, better-trained crew and providing better quality food, which lead to customer satisfaction, customer retention and word of mouth advertisement. However, the Vice President is helpless in this case because the catering department serves food of average quality in order to keep the costs down. The human resource department does not care if the crewmembers are friendly enough. The maintenance department is indifferent about high quality and constant cleaning and just focuses on ordinary services. Furthermore, the finance department has been increasing the fares in order to improve the liquidity position of the company (Cahill, 2008). Therefore, no organization can ever succeed if all its departments embrace the marketing function. In fact, all the employees within a company must “think customer” because marketing is not merely a function but it is an orientation, which should be adopted by the entire company (Peter and Donnelly, 2010). This paper is an attempt to explore the activities conducted at Southwest Airlines, how they fit the framework of internal marketing, their impacts, benefits, and possible recommendations to improve them. Discussion Southwest Airlines entered the US airline industry in the year 1971 as the first low cost carrier with a unique business model. The founders knew that their unique approach and contrarian business model would not succeed if they failed to instill the idea of value creation through customer satisfaction in the hearts and minds of every employee of the company. King and Kelleher, founders of Southwest, knew that they were asking for a lot so they made the workplace a “fun place” and allowed them to share the gains through profit sharing programs and frequent bonuses (Gittell, 2005; Smith and Mounter, 2008). Employees know that the marketing programs of the organization portray it as a friendly and fun airline; therefore, they do the same. One might find airhostesses singing, flight attendees humming, and security guards receiving you with big smiles. During the past 25 years, the company has only laid off three employees whom the organization quickly hired back as well (Peter and Donnelly, 2010). In order to deliver customer cleaner and better planes, even the pilots would step up and help the flight attendants and crewmembers for cleaning up the plane. Since the day one of orientation, every employee learns about the mission statement, values, and marketing goals of the company (Lauer, 2010). Unlike other airlines, employees do not have detailed job descriptions because their ultimate job description is to keep the customers happy (Nikbin, 2010). In order to complement the marketing department in their low cost strategy, the procurement and operations department decided to stick with only Boeing planes, unlike other competitors, which fly planes of many suppliers (Drake, et al., 2005). Although, the company was tempted to buy planes for lesser prices and other benefits from different suppliers, it decided to stick with just one supplier since that indirectly supports the marketing strategy of low fares and greater knowledge of employees about the service. Using only one type of aircraft means that the training costs of the technical crew and pilots were kept down, lesser maintenance technicians required and employees could be easily trained about the planes (Hill and Jones, 2009). When Braniff International Airways offered customers a flight for 13 US dollars between Houston and Dallas, Southwest Airlines responded to that offer by offering customers a couple of options. First option was to fly with Southwest airline for the same price (original fare was 26 US dollars for that route) and the second option was to fly for the usual fare of 26 US dollars and get a free bottle of premium whiskey on that flight. (Botha, et al., 2009) The response was tremendous. Southwest’s flights were packed and for a while, it became the biggest liquor provider in the State of Texas. The fact is that the finance department did not object to this strategy because they indeed had the marketing focus and knew that this attempt might appear to be increasing the costs for a few weeks but the returns would start appearing within a few months (Berry, 2009). The awards and honors, which the company has received and its financial performance, both speak to great limits about the success of the organization in creating a marketing focused and in turn, customer focused organization. In the year 2005 and again in the year 2008, the American Customer Satisfaction Index identified Southwest Airlines as leading the industry in terms of customer satisfaction (Pickton and Masterson, 2010). Furthermore, even when Southwest has not been able to take up the first place, it has remained in the top five (Gittell, 2005). Airline of the Year, Most Admired Airlines, Best Company to Work For, Triple Crown and others are just a few laurels to mention which the company has earned during the past decade or so. More importantly, in an industry where airlines have come and gone, sought bankruptcy protection several times, merged and acquired, Southwest posted profits for the 39th straight year. It is the third largest airline in the North American region and the world in terms of customer traffic (Boone and Kurtz, 2011). Although, there are no doubts in the fact that Southwest has made great progress with its internal marketing practices, its organizational structure remains somewhat unsupportive of internal marketing, working on which might lead to more effective internal marketing. Currently, the organization has a functional structure with Gary C. Kelly as the Chairman, President, and CEO of the company. The CFO, COO, CIO, and CTO of the company along with the Senior Vice Presidents of Marketing, Operations, Strategy and Planning, Culture and Communications, Procurement, Customer Services, Legal and Administration and Human Resources, report to the CEO. These Senior and Executive Vice Presidents have different Vice Presidents with functional responsibilities reporting to them. For example, the Vice Presidents of Labour Relations, Employee Relations, and Strategy and Change Leadership come under the Senior Vice President of Human Resource and Administration (Pickton and Masterson, 2010). The point here is that functional structure might be holding back Southwest Airlines from exploring its full potential in terms of internal marketing. Perhaps, a market management organization might allow Southwest Airlines to create a more viable internal organizational structure allowing more smoothness to internal marketing (Marshall et al., 2009). The fact is that Southwest Airlines is dealing with several markets, which are geographic such as Western America, Southern America and others and customer segmented such as business travelers, vacation families, and others (Ferrell and Hartline, 2010). Therefore, it should create a structure where there would be people assigned with the tasks of developing these markets for the company and would be assessed on the basis of sales and profitability generated from these markets. Companies such as IBM, HP, and Xerox have done the same by placing different senior managers responsible for developing markets and different line managers would be answerable to them. This is an even better approach to bring employees closer to the overall marketing function (Kourdi, 2011). Conclusion Due to extensive indulgence in internal marketing, Southwest Airlines has been able to create a unique company culture, which deifies all the industry trends and norms. Since employees know their job, they are well aware of the strategic vision, communicate extensively, and enjoy extreme level of cohesiveness amongst teams, groups and departments, Southwest Airlines has found just the right balance of promoting hard work and fun within their organization (Grubbs-West, 2005). Freigberg and Feriberg (2010) in their book “Nuts!” mention Southwest Airlines as an organization, which has been able to keep the prices at rock bottom for years and believes that customers comes second, employees are the ones that come first. Rather than going for simplicity and sophistication, Southwest chooses to paint its 50 million aircrafts to look like killer sharks, flying peacocks and state flags. The company is noted for spending more times on planning parties and outings than writing down formal rules, regulations, strategic plans, and company policies. Internal marketing has provided the company with the courage to run recruiting ads where it says that “come join us because at our place, wearing pants is optional. The company even once won a legal dispute with arm wrestling (Murphy, 2010). The fact is that even if some other airline were to copy this culture, which appears as over friendly, carefree, rebellious, lighthearted, and happy-go-lucky, it would not be able to do the same until, and unless it creates a marketing department that virtually involves all employees of the organization, from the CEO to the security guard (Grubbs-West, 2005). Southwest airlines can afford this jolliness because the organization knows that when it is time for work, the employees would keep everything aside and try to make the customer happy, regardless of their department and job function, since the company has done everything to make them happy (Freiberg and Freiberg, 2010). References Berry, Lamar D. 2008. 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