Implementing Relationship Marketing: the Role of Internal and External Customer Orientation

IMPLEMENTING RELATIONSHIP MARKETING: THE ROLE OF INTERNAL AND EXTERNAL CUSTOMER ORIENTATION

by

T.F.J. Steyn*, S.M. Ellis** and F.A.A. Musika*

*WorkWell: Research Unit for People, Policy & Performance
School of Entrepreneurship, Marketing and Tourism Management
Potchefstroom Campus
North West University[1]

**Statistical Consultation Service
Potchefstroom Campus
North West University

Paper presented at the European Institute for Advances Studies in Management (EIASM) Workshop on Relationship Marketing, EIASM, Brussels, Belgium, 27 – 28 January 2004

IMPLEMENTING RELATIONSHIP MARKETING: THE ROLE OF INTERNAL AND EXTERNAL CUSTOMER ORIENTATION

ABSTRACT

Developing an internal and external customer orientation will facilitate the implementation of relationship marketing principles by businesses. Relationship marketing highlights the need for an external customer orientation, which in turn raises the need for customer-oriented employees. Employees will only be customer-oriented if an internal customer orientation is evident in the business.

Four constructs pertaining to the internal customer orientation of small- to medium-sized textile retailers in the North-West Province were identified. After checking for internal consistency, effect sizes were determined for these constructs analysing the practical significance of employees’ as opposed to management’s opinion on the underlying constructs. Similarly, four constructs referring to the external customer orientation of the same businesses were identified. The four identified constructs underpinning an external customer orientation were also checked for internal consistency and the practical significance of customers’ as opposed to management’s opinion on the underlying constructs was determined through effect sizes. It was found that the identified businesses lack both an internal and external customer orientation.

Recommendations are made to improve internal customer orientation for the

References: Barnes, J.G. 2001. Secrets of Customer Relationship Management: it’s all about how you make them feel. New York : McGraw-Hill. Bendapudi, N. and Leone, R.P. 2002. Managing Business-to-Business Customer Relationships Following Key Contact Employee Turnover in a Vendor Firm. Journal of Marketing, (66) April: 83-101. Buttle, F. 1996. Relationship Marketing. In: Buttle, F. (ed.). Relationship Marketing: theory and practice. London : Paul Chapman. Chaston, I. 1995. A Typology for Evaluating Branch-Level Perceptions for Internal Customer Management Process within the UK Clearing Banks. The Service Industries Journal, (15)3:332-349. Clark, L.A. and Watson, D. 1995. Construct Validity: basic issues in objective scale development. Psychological Assessment, 7(3):309-319. Cohen, J. 1988. Statistical Power Analysis for Behavioral Sciences. Hillside, NJ : Erlbaum. Conway, T and Willcocks, S. 2000. Relationship-based services marketing: the case of the new primary care groups in the National Health Service (UK). The International Journal of Public Sector Management, (13)1:68-84. Day, G.S. 2000. Managing market relationships. Journal of the Academy of Marketing Science, (28)1:24-30. Engel, J.F, Blackwell, R.D, and Miniard, P.W. 1995. Consumer Behaviour. Orlando: Harcourt Brace & Co. Fornier, S. 1998. Consumers and Their Brands. Developing Relationship Theory in Consumer Research. Journal of Consumer Research, (24) March: 343-373. Kennedy, K.N., Goolsby, J.R. & Arnould, E.J. 2003. Implementing a Customer Orientation: extension of theory and application. Journal of Marketing, (67)4: 67-81. Kotler, P. and Armstrong, G. 2001. Principles of Marketing. Upper Saddle River N.J: Prentice Hall. Koufteros, X.A., Vonderembse, M.A. and Doll, W.J. 2002. Examining the competitive capabilities of manufacturing firms. Structural Equation Modelling, 9(2): 256-282. Beth, S., Burt, D.N., Copacino, W., Gopal, C., Lee, H.L., Lynch, R.P. and Morris, S. 2003. Supply Chain Relationships: building relationships. Harvard Business Review, July: 64-73. Lewis, R.C. 1989. Hospitality marketing: the internal approach. Cornell Hotel and Restaurant Administration Quarterly, (39)1:41-45, November. Malherbe, M.D. and Pearse, N.J. 2003. The relationships between job enrichment, job satisfaction and service quality: an exploratory study in the retail industry of South Africa. Management Dynamics: contemporary research, (12)2:2-12. Morgan, R.M. and Hunt, S.D, 1994. The Commitment-Trust Theory of Relationship Marketing. Journal of Marketing, (58)3: 20-38. Morris, M.H., Brunegee, J. and Page, M. 1998. Relationship Marketing in Practice: Myth and Realities. Industrial Marketing Management, (27):359-371. Ostroff, F. and Smith, D. 1992. The Horizontal Organization. McKinsey Quarterly, Winter: 22-23. Patterson, P.G and Smith, T. 2001. Relationship benefits in service industries: a replication in a South-East Asia context. Journal of Services Marketing, (15)6:425-443. Reinartz, W. and Kumar, V. 2002. The Mismanagement of Customer Loyalty. Harvard Business Review, July. SAS Institute Inc. 1999. SAS/STAT Procedure Guide, Version 6, Third Edition, Volume 2. Cary, NC: SAS Institute Inc. Saren, M.J. and Tzokas, N.X. 1998. Some Dangerous Axioms of Relationship Marketing. Journal of Strategic Marketing, (6)3:187-196. Sasser, W.E. 2003. How your Employees and Customers Drive a New Value Profit Chain. Harvard Business School Working Knowledge, http://hbswk.hbs.edu/item.jhtml?id=3405&t=operations. Date accessed 24 June 2003. Sheth, J. and Parvatiyar, A. 1995. Relationship Marketing in Consumer Markets: Antecedents and Consequences. Journal of the Academy of Marketing Science, (23)4:255-271. Steyn, H.S. (jr.). 2000. Practical Significance for the Difference in Means. SA Journal of Industrial Psychology, (26)3:1-3. Strauss, B. 1995. Internal services: classification and quality management. International Journal of Service Industry Management, (6)2:62-78. Taher, D., Leigh, T. and French, W. 1996. Augmented Retail Services: The Lifetime Value of Affection. Journal of Business Research, (35):217-228. Too, H.Y., Souchon, A.L. and Thirkell, P.C. 2001. Relationship Marketing and Customer Loyalty in Retail Setting: a Dyadic Exploration. Journal of Marketing Management, (17):283-319. Zikmund, G.W. and d’Amico, M. 2001. Marketing. Cincinnati, OH : Thomson Learning.