Internal Marketing in Restaurant

Internal Marketing in Restaurant


Question:
Discuss about the Internal Marketing in Restaurant.

Answer:

Introduction

The study throws light on the business problem experienced in restaurants. Internal marketing is an important element of a business. Internal marketing refers to a process that occurs and is implemented within an organization, with an intention to align, motivate and educate employees so that they are successful in delivering quality customer service. Internal marketing has direct bearing on customer satisfaction. It needs no rocket science to decipher this fact and therefore, restaurants have to embark on effective internal marketing to facilitate better customer satisfaction. Customer satisfaction has direct correlation with the success of an organization.

Brief Overview of Attica Restaurant

Attica restaurant is one of the most reputed and renowned restaurant of Australia located in Melbourne. The restaurant has attractive features and boasts of an entrancing and serene ambiance. The location of the restaurant is strategic and pleasing. The restaurant provided delicious and tasty cuisine, which draws customers from various corners of the country. The restaurant looks after the diet requirement of the customers and the menu list of the restaurant highlights variety of dishes prepared by the restaurant, which are made according to the taste and preference of the customers.

Research Problem

One of the chief areas of importance for restaurants is to cater to the needs and requirements of the customers. The quality of the dishes and the service provided to the customers has deep implications and importance since customer satisfaction is directly related with the success of an organization. Internal marketing has great importance regarding smooth and efficient functioning of the operations of the business. However, one of the basic problems that can be seen is that employees suffer from lack of knowledge about the product of an organization and lack proper understanding about the importance of quality service. In the proposed study, the research problem related to the lack of effective training and development provided to the customers. The restaurant has to treat its employees as important stakeholders and provide quality training and education to the employees so they are more versed with the importance of quality service and the product of the restaurant. Effective communication is a major absence and it serves as the limitations and shortcoming in the internal functioning of the organization. Lack of effective communication with the employees and the failure to effectively train the employees is seen as the research problem in the study.


Method of Analysis for the Study

Qualitative and quantitative methods are used for the analysis of the research problem. Primary data method is used for the purpose of conducting effective research. Questionnaires and surveys will be used for conducting quantitative study with the employees. The managers of the restaurants will be interviewed personally for qualitative study.

Research Questions

  • What is the correlation of quality service with customer satisfaction?
  • How can the employees be properly trained and educated for better discharge of service to customers?
  • How will the restaurant combat the problem relating to internal marketing?

Literature Review

Introduction

This section will shed critical light about the importance of internal marketing in restaurants and its relation with customer service. Internal marketing is an indispensable element of a business and shows employees as a valuable unit of an organization (Agnihotri, Hu & Krush,  2016). Educated employees have greater chances of providing quality service and are the face of an organization. The importance of internal marketing has grown tremendously in the current years and therefore, organizations have to embark on better training processes of employees so that they can improve and hone their skills, which will have direct bearing on the operations and success of an organization. With changing taste and preference style and growing popularity and success of the tourism industry, it becomes important for restaurant to increase their benchmark of quality and standard procedures so that they are able to survive the intense competition and overhaul the difficulties that they face. It is important and critical that restaurant observe and follow a customer oriented market approach that will help them to meet the needs and demands of the customers and consequently increase customer satisfaction. According to surveys and reports, about 67% of the restaurants fail in their initial year of service and consequently are unable to survive the competition in winning customer base and achieving customer satisfaction (Selnes, 2013). One of the basic features of marketing is to achieve high customer satisfaction so that they are able to retain existing customers and also form a new customer base.
One of the problems that is noticed among the restaurants, which results in the collapse and crippling of the restaurant is the lack and failure of the organization to successfully implement internal marketing. The organizations are unable to effectively discharge the functions of staffing, which results in employee turnover and failure of restaurants business to survive in the service sector. One of the main aims of restaurant industry is profitability and survival (Akroush et al. 2013). The figures of the employee turnover have escalated in the past few years, which has contributed to the downfall of many restaurants and has been the root cause for low profits and sales.

Concept of Internal Marketing

Internal marketing is defined as the promotion of the firm and its product to the employees so that they are better verse with the products and are more educated about the products and the strategies of the companies (Bell, Buttigieg  & Iverson, 2015). It will help the employees to be more and aware and educated about the products and strategies of the company. Employees are a vital part of an organization and have direct correlation with the success of the company. For companies in the service sector, it becomes an important fact that the employees are properly trained and equipped about the product lines of the company and are trained to discharge premium quality service to customers. For restaurant industry, the quality of service is one of the main criteria for achieving customer satisfaction (Akroush et al. 2013).

Theories of Internal Marketing

Relationship Mediated Theory

Relationship mediated theory is one of the most important theories and concepts for internal marketing. According to this theory, internal marketing is a way of developing relationship and creation of value between the organization and the employees as well as the customers. According to this theory, internal knowledge about the products and the strategies of the firm is critical and has direct relationship with the external marketing of the company. The theory focuses on the internal element of a restaurant regarding employees. Employees create value for an organization (Winston & Cahill, 2012). Therefore, it is important that the employees are better trained and equipped in providing quality service to customers so that it can create value for the restaurant. The theory stresses that it is integral and important that the experience and knowledge of the employees is enhanced with the intention of creating value for the organization. The theory stresses on the creation and implementation of knowledge enriching environment.

Theory of Internal Marketing

According to the theory lf internal marketing, the attitude of customers towards a company is not just influenced with the product. The attitude of the customers is influenced by the experience of the customers with the organization (Bang, Oh & Chung,  2016). Thus, this theory of internal marketing states that all the elements that the customer comes in contact with the organization have a bearing and an important impact on the psychology of the customers. Thus, the workforce of an organization has an important effect on customer satisfaction. It can be viewed that the service provided by the employee has an important bearing on customer satisfaction (Winston & Cahill 2012).

Factors of Internal Marketing

Effective internal marketing depends on the organizational structure and effective and efficient organizational functioning. Organizational harmony is an important factor regarding internal marketing. There needs to be good communication and strong relationship between employees, managers and the CEO (Saad, Hassan & Shya 2015). Barriers to communication need to be removed and both upward and downward flow of communication needs to be facilitated. There many organizational issues that constrict the smooth flow of operations. One of them is “internal politics.”  Internal politics should be eliminated and removed by strong organizational structures (Matanda & Ndubisi, 2013).

Concept of Customer Satisfaction

Customer satisfaction refers to a marketing term that refers to fact that the service and product of an organization meets or surpasses the expectations of the customers (Gounaris & Boukis, 2013). Therefore, it can be seen that customer satisfaction refers to the fact that products and services meet the need and demand of the customers. It is a yardstick that business can use to improve their operations and functions. Customer satisfaction deal with the benefit that a product or a service provides to a customers and the degree of satisfaction it provides to the customer. Customer satisfaction is the benchmark and the metric for the measurement of the success of and organization.

Theories of Customer Satisfaction

Negative Theory

According to negative theory, if there is any difference between the expectations of the customers and the value provided by a product, then there would be negative energy.  The theory is strongly based on disconfirmation process (Ferdous & Polonsky, 2014). According to this theory, dissatisfaction might occur if there is any difference between expectation of the customers and the performance of the customer. This will have a negative impact on the satisfaction level of the customers. It will give rise to disconfirmation.

Two Factor Theory

According to two factor theory, a customer can have satisfaction as well as dissatisfaction with products and services simultaneously. The rationale of this statement stresses on the point that satisfaction and dissatisfaction with a product is subjective and therefore, a customer might have satisfaction and dissatisfaction with a product simultaneously because satisfaction and dissatisfaction is regarding perception of the customers about the various features of a product and service and they are unrelated.

Dual Factor Theory

Dual factor theory further strengthens the two factor theory. The theory states that a product has to achieve instrumental performance and expressive performance. Instrumental performance deals with the physical aspect of a product and expressive performance relates to the psychological aspect of a product. According to this theory, a product orSservice has to heavily imply on psychological aspect, in order to achieve customer satisfaction (Cina,  2013). A customer will be not satisfied if the expressive performance of the product or service is not up to the mark. Expressive performance is an important yardstick for customer satisfaction.

Factors of Customer satisfaction

There are certain factors that affect customer satisfaction. Some of them are:

Quality of Service

Quality of service is the major criterion of customer satisfaction. The quality of the service that is provided to customers has deep and strong impacts on the customers regarding their satisfaction level. Premium and high quality service results in high customer satisfaction and casts a positive image. Sub standard and poor quality service provided to customers have a negative impact on the customer satisfaction (Martínez & del Bosque,  (2013).

Price of the Product and Service

Price of the products and service has strong impacts on customer satisfaction. It is seen that price and customer satisfaction is inversely related to each other. It can be seen that the price of the product and service needs to be set at an optimum level to induce a positive impact on the customer satisfaction. Too high or too low price level of product and service can have negative impact on customer satisfaction and buying behavior of customers (Conradie,  Roberts-Lombard & Klopper, 2014). 

Impact of Internal Marketing on Customer Satisfaction

One can see that there is direct relationship between internal marketing and customer satisfaction. The current generation has witnessed a strong growth in the service sector in the global market. This accelerated growth is accompanied by stiff competition among service sectors, especially restaurant. The need for good and effective internal marketing deems to be a must for good and high customer satisfaction. The two variables, internal marketing and customer satisfaction are directly correlated (Keelson, 2014). Proper internal marketing is important and is an important yardstick for customer satisfaction (Bang, Oh & Chung, 2016). Therefore, organizations have to pay special attention to employees because they are an important force and have direct effect on the quality of service provided to customers. The employees have to be aware of the product and strategies of the organization so that they can have a positive effect on the customers and strong customer satisfaction will ensure success and growth for the organization. Customer satisfaction is majorly influenced by the company’s employees and the perception of value and satisfaction is depended on how the employees act and discharge their duties. Thus, it is important that staff training and sound communication should be properly implemented to have a strong influence on the employees, which will enable them to discharge quality service to the customers. It will help the company to survive in the competition and will ultimately secure the success and growth of the organization (Mathe & Slevitch, 2013). 

Gaps in the Literature

There are certain gaps and limitations that is in the literature. One of the gaps that is noticed in the literature review is that there is lack of effective training and marketing done within the organization. Companies suffer from major limitations in terms of effective training programs. The employees are not properly trained and in such circumstances, poor internal marketing is noticed within the organizations. This has major impact in the customers since they are unable to provide quality service to customers. Another gap in the literature is that there is lack of sound and proper communication between the managers and the employees, which does not make them properly trained and equipped to discharge quality services.

Research Methodology

Research Design

Research design refers to the overall strategy and methods that is used to conduct the research. The blueprint of a research strategy is a research design. It is used to connect the various elements for a research study in a logical and effective way to achieve the purpose and objective of a research and therefore, address the research questions in the process. The different type of research designs are “exploratory”, “explanatory” and “descriptive” research design. “Exploratory” research design refers to a research that is conducted for research problem that is not clearly defined. Such research is undertaken when there are few research work conducted on the problem in the past. It helps in providing future research work on the research topic and issues (Flick, 2015). Such research design is used when the research problem and issues is in a preliminary stage and critical insights are required for a problem. When a research problem requires cause and effect relationship to be established, then “explanatory” research design is required. It helps in analyzing the relationship of the variables that are associated with the research problem(Panneerselvam, 2014).  It helps in comprehending the interaction of the variables and presents the rationale of the research study. The research design that is used to describe phenomenon and the participants of a research study is called “descriptive” research design (Panneerselvam, 2014). It outlines and provides additional information to a research problem. It depicts the participants of a research problem in a more logical and accurate way. The research design that will be used for this research study is “explanatory” research design.

Justification of the Research Design

The research design that will be used for the research purpose is “explanatory” research design. The purpose of the research is to establish the importance and interrelationship between internal marketing and customer satisfaction. The internal marketing of Attica Restaurant is studied and cause and effect relationship between the internal marketing of Attica Restaurant and the customer satisfaction it generates is studied. Thus, it will require “primary data research” since the internal marketing of Attica Restaurant is distinctive and unique in comparison from others. It is important to establish the cause of poor internal marketing and the effect of internal marketing of Attica restaurant on customer satisfaction. Therefore, it is important that primary research method and “explanatory” research design is the most appropriate research design that is used for research purpose. It will give direct and most appropriate answers to the research questions.

Research Approach

Research approach refers to the method or the approach that is sued for conducting research (Pickard, 2012). There are various research approach that are available for conducting research. “Inductive” research approach refers to the fact that different models and theories need to be created for conducting effective research on the research problem. “Deductive research approach refers to the fact that different relevant theories and models are used for conducting research on the research topic and for answering the research problem. “Abductive” research design refers to the research that is conducted to answer puzzling or unusual research problems and issues (Pickard, 2012). For the purpose of the research, “deductive” research approach is adopted for the research purpose.

Justification of the Research Approach

“Deductive” research approach will be required for the research purpose. The rationale behind this choice is time and money. “Deductive” research approach will require less time and money for the research process. Less effort will be required for analyzing the research problem and issue. Other research approach requires more time and effort and limitation of budget can be major constraint if other research approach is sued.

Research Philosophy

“Research philosophy” refers to the belief that how a data should be used, analyzed and interpreted. It refers to the treatment and application of data while conducting research (Taylor, Bogdan & DeVault, 2015). The development of the research background and research information is called research philosophy. There are various research philosophies that are used for research purposes. “Positivism Research Philosophy” and “Interpretivism Research Philosophy” are the various types of research philosophies. “Positivism Research Philosophy” refers to the collection of fact and logical data from sources during the data collection method. “Interpretivism Research Philosophy” refers to the method that authentic and correct data is collected through socially established methods (Taylor, Bogdan & DeVault, 2015). “Positivism Research Philosophy” is the research philosophy that is used for the research process (Mackey & Gass, 2015). 

Justification of Research Philosophy

“Positivism Research Philosophy” is the chosen research philosophy for the research process. The rationale behind this choice is that it helps in obtaining true and authentic data and facts that is required for the research purpose. It enables better comprehension of the research problems and issues and assists in achieving research outcome. The research problem is a narrow topic based on the internal process of Attica Restaurant and it requires primary research process that will help in achieving the research outcome.

Research Strategy

Research strategy is the method that is used for conducting effective research (Silverman, 2016). The research strategy that will be used for this research purpose is primary data research method. “Qualitative” and “Quantitative” data collection method is used for the research purpose. “Statistical tools” and “focus groups” are used as the research strategy.

Justification of the Research strategy

The research is conducted on Attica Restaurant. The research is based on a specific organization and therefore primary data would be required to efficiently conduct data research. Primary data collection method would be required to collect qualitative and quantitative data from the sources of the restaurant. Thus, it is the most feasible and appropriate research strategy according to the research problem.

Data Collection Method

Primary data research method is used for the research purpose. For the data collection purpose, “qualitative” and “quantitative” data collection techniques are used. Questionnaires and surveys are used for quantitative data collection method, while interviews are used for qualitative data. “Statistical tools” and “focus groups” are used for evaluating quantitative data and qualitative data respectively. Questionnaires and surveys are provided to the employees to gather information about the operations of the restaurant and the issues faced by them in the daily operation. Interviews are conducted with the managers of the restaurant to obtain qualitative data as to how they will improve the internal processes of the restaurant and how they will combat the issues noticed in the organization. The interviews that will used to address the research questions and the gaps noticed in the research process.

Sampling Size and Techniques

“Non-probability” sampling method is used for analyzing qualitative data, while “probability” sampling method is used for analyzing quantitative data. 80 employees of the restaurant and 4 managers of the restaurant are used for sampling purpose.  The response rate of the study was 50% since 50% of the sample population responded to the research questions.

Data Analysis Method

For research purpose, “statistical tools” and “focus groups are used. “Qualitative data” and “quantitative data” are used for research purpose. “Statistical tools” and “focus groups” are the key tools that are used for evaluating and analyzing data.  “Statistical tools” are used for analyzing and evaluating the data obtained from quantitative study. The responses of the employees are analyzed with various statistical tools. “Focus groups” are used for evaluating the responses of the managers. It is an important method that is used for analyzing the data that will be used for the research study. It focuses on a specific group that will critically contribute to the research and study of the data provided for the research purpose.

Ethical Issues

The observance and implementation of ethical practices is a basic necessity while conducting research. It is important that ethical principles are observed during the process. Some of the ethical issues that are seen during a research study are:
Disclosure of information collected for research purpose
One of the issues that are noticed during research purpose is disclosure of information and preservation of information. It has to be noticed that information and data that is collected during eh research should not be used for research purpose. Proper security of information and confidentiality of information should be done from data.
Undue influence should be made on the respondents
At times there are undue influence and pressure created on the respondents during the research process. Major stress has to be given that the respondents do not feel pressurized and threatened during the research process. Research should be free from any unethical practice.
Disclosure of identity of the respondents
Disclosing and exposing the identity of the respondents is an ethical approach that is seen during research process. The respondents are assured of confidentiality of the responses and the responses given by the respondents. Therefore, it has to be given special attention that the confidentiality of the identity of the respondents is kept in mind.

Recommendations to Ensure Ethical Practice

Implementation of Strong Policies and Rules

Strong rules and policies need to be created for implementation and observance of ethical practices. There has to be strong policies and rules regarding the treatment of data, methods and ways in which data is collected.

Non-Disclosure Policies of Information

There has to be special attention and stress given to non-disclosure policies of information. There has to be specific attention given to the need of securing of data and the non-disclosure of information for commercial purpose. Penalties and fine should be implemented for non compliance of the rules and regulations. The identities of the respondent should not be disclosed.

Fair Treatment of Respondents

The respondents should be treated in affair and just way and no undue influence should be made on the respondents. The respondents should not feel pressurized or threatened during research. Ethical justification of the purpose of the research should be made.

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