An Evaluation of Internal Marketing Practices of Multinational Companies (MNC) in Brazil

Transcription

1 An Evaluation of Internal Marketing Practices of Multinational Companies (MNC) in Brazil Autoria: Waleska Vasconcelos Queiroz, Fatima Regina Ney Matos Abstract This research is undertaken to evaluate Internal Marketing practices. The area under investigation is the MNC operating in Brazil. A literature review was conducted to identify previous research carried out, and gain a broader understanding of Internal Marketing and its benefits as well as its implementation and barriers. The definition of IM is still to be agreed upon. Consequently, there are different definitions of IM and most of them have a different approach. The primary data was collected by questionnaire which were distributed to key people such as Marketing or Human Resource managers of 100 companies. However only 19 companies participated. The questions were in English and Portuguese. The researcher managed to create a general picture of Internal Marketing practices used by MNC operating in Brazil. Therefore Internal Marketing practices in those companies were analysed and managers perceptions towards Internal Marketing understanding examined. Questions were designed in order to investigate which Internal Marketing practices are used in those companies. The findings show that the companies researched use communication techniques, and motivational programmes. As a result, it can be assumed that they have an Internal Marketing attitude. In addition, the managers seems to have a good understanding about the topic researched. 1. Introduction With the advent of globalisation, the number of multinational companies has increased considerably. In particular, the last two decades have seen dramatic changes in international trade and business (DOWLING et al, 1999). Many factors have contributed to the rapid increase in the internationalisation of business activity, such as the developing speed and efficiency of global communications, the awareness of economies of scale, and some internationalisation of consumer habits. As a result a large number of companies are internationalising their operations which lead to a world-wide competition. Companies are forced to deal with complex issues as they seek to gain or maintain competitive advantage. A key component of an overall successful global strategy for any company is a workforce that is able and prepared to handle with the necessary demands. With the purpose to build and encourage their competitive advantage, the knowledge of an organisation s personnel needs to be viewed as a critical strategic resource. Therefore Internal Marketing is suggested in this research as a managerial tool to implement strategies and to enhance organisation s potential for the future. The globalisation of business and the evolving recognition of the importance of customer retention and of customer relationship economics, along with other trends, demonstrate the changes in how to view and to do marketing. Relationship Marketing is one leading new approach to marketing. It is believed that Internal Marketing is part of Relationship Marketing concerning the six markets model: customer market, supplier/alliance market, influence market, referral, recruitment and internal market (PECK et al, 1999). In order to succeed an organisation has to develop relationships with the above markets. This will serve as the basis of a lasting partnership. The importance of relationships between the organisation and its employees has been the focus for research. Researches have tried to find out the association between the Internal Marketing implementation practices and external customer satisfaction within the organisation. It is understood that satisfied and committed employees provide a greater level of service quality to the external customer. 1

2 The concept of Internal Marketing has its roots in the 1980s in the US and in the UK (THOMSON, 1990) in the search for quality in the services sectors through the employees, the service delivery instrument (RAFIQ; AHMED, 1995). However there is no agreement on a common conceptual framework for Internal Marketing. There are a number of divergent perspectives to the meaning of Internal Marketing. One approach to Internal Marketing is given by Berry and Parasuraman (1991, p. 272) who define Internal Marketing as viewing employee as internal customers, viewing jobs as internal products that satisfy the needs and wants of these internal customers while addressing the objectives of the firm. Internal Marketing in Brazil has not been widely explored. However there are some researchers contributing to the investigation in this field. In 1992, the Brazilian Association of Sales and Marketing (ADVB) created an award for the best Internal Marketing programmes. The effective involvement of people is fundamental to any organisation. They are valuable resources, one of the most important assets, the basic foundation for change within an organisation. In addition, in order to achieve its goals effectively it is crucial the commitment of its people. It is believed that employees satisfied can provide better service, as a result, satisfy customers, reduce costs and increase profits. It would be impossible for an organisation to succeed without the commitment of its people. For those reasons, one way to overcome any problem effectively within an organisation is through a good management using Internal Marketing as a tool. This research is aimed towards people who have an interest in marketing and human resource management; in particular how Internal Marketing is managed in MNC operating in Brazil. The main aim of this study is to compare differences in approach and attitudes to Internal Marketing among MNC operating in Brazil. 2. Definition of Internal Marketing (IM) The definition of IM is still to be agreed upon. There are different definitions of IM and most of them have a different approach. The direction from which one examines IM depends on what one expects to get out of the process and the level of analysis. IM is proposed as a management approach, which enables and motivates staff increasing their job satisfaction, their performance and lowering turnover (VAREY, 1995). Foreman and Money (1995) refer to IM as a tool to improve intra organisational relationship and obtain motivated and customer conscious personnel at every level. Similarly Davis (2001) considers IM as an approach to managing, consequently, a way of helping to bridge the organisational hierarchical gap. It also informs and involves staff in new initiatives and strategies. Whereas, Ahmed and Rafiq (1995) propose that IM involves "a planned effort to overcome organisational resistance to change and to align, motivate and integrate employees towards the effective implementation of corporate and functional strategies". This is a broad definition of IM, which puts more emphasis on the implementation of marketing to achieve customer satisfaction than on the process of the employee as a customer. IM as a marketing area, which tries to adapt strategies of the traditional marketing used for external customers to use inside the organisation. Endomarketing is used as a link between customers, product and employees. Before to sell a product to the customer, the company needs to convince their employees to buy the product. Sasser (1976) pointed out that the successful company must first sell the job to employees before it can sell to its services to customers. 3. Increase Customer Satisfaction Customer satisfaction has become the spotlight to many and wide-ranging approaches to management and strategy over the last decades. Recently much attention has been focused 2

3 on Relationship Marketing more specifically on how to manage the boundary between an organisation and the outside world where the main relationship is with the customer, and the objective is to satisfy the customers for a productive and long-term relationship. It has been recognised that companies have internal and external customers as well as internal and external markets (PIERCY, 1995). This view has important implications for the customer satisfaction issue. Firstly in analysing the barriers it may face, secondly, in designing effective implementation strategies. Piercy (1995) believes that for problems of implementation and change it can be used the same models and methods both inside the organisation and in the external marketplace. This makes clear that external market issues and internal market issues are directly connected. Customer satisfaction is the leading criterion for determining the quality that is actually delivered to customers through the product/service and by the accompanying servicing (VAVRA, 1997). Satisfaction is the consumer s fulfilment response. It is a judgement that a product or service feature, or the product or service itself, provides a pleasurable level of consumptionrelated fulfilment (ZEITHAML; BITNER, 2002). Customer satisfaction results from creating value for customer and by meeting or exceeding their expectation (HANSON, 2000). Company can create value by providing better customer services, by personalised services or through better communication with the customer. Customer satisfaction can be achieved if company meet customer expectation that what the customers have an image of the product or service and the company in their mind. If the performance matches the expectation, the consumer is satisfied (KOTLER; ARMSTRONG, 1994). According to Piercy (1992) IM of the company is a tool to make the changes necessary for their external strategy to be effective. In this way it is fundamental co-operation and involvement from the people and groups inside the company. Christopher, Payne e Ballantyne (2002) also confirm that IM is a strategy for developing relationships between staff within the organisation in order to enhance external market place performance. Therefore, IM is a management approach, which emphasises the importance of employees in the organisation s efforts to satisfy its external customers (PROCTOR, 2000). External customers who experience a high-quality service will be satisfied and consequently will repeat their purchase. Piercy (1992) suggest that the IM strategy for customer satisfaction is not about customer satisfaction questionnaires it is about understanding the behavioural and organisational barriers to achieve external customer satisfaction. The barriers could be people s belief about the market, their fear of customer reaction and lack of belief in customer satisfaction. The change of employee attitudes, values and perceptions of the external customer and the improvement of communications as well as distribution channels are extremely important to achieve customer satisfaction. After evaluating the internal barriers to customer satisfaction and developing implementation and IM strategies around those barriers, customer satisfaction can be measured and used in strategic marketing decision-making. 4. Increased Employee Satisfaction and Motivation According to Zeithaml and Bitner (2002) it is important to focus on service employees because they are the service, the organisation in the customer s eyes, the brand and marketers. They also believe that it is difficult to achieve customer satisfaction if employees are not happy in their job and not treated fairly by the organisation. IM activities in an organisation increase their ability to deliver service promise through recruiting, training, motivating, rewarding and providing equipment and technology. In order to keep employees motivated to perform in customer-oriented and serviceminded ways organisations must have some IM strategies. Such as hiring the right people, 3

4 developing people to deliver service quality, providing the needed support systems and retain the best people (ZEITHAML; BITNER, 2002). A great attention should be focused on hiring and recruiting personnel. Identifying and competing for the best people using their marketing expertise. Once potential employees have been identified, organisations need to verify if those candidates match the company s need. In the case of service employees they need both service competencies and service inclination. Another way to hire the best people is to be known as the preferred employer in a specific industry or location (ZEITHAML; BITNER, 2002). Once the right people are hired, the organisation must provide training in the necessary technical skills, knowledge, interactive skills and work with them to ensure service performance. Research suggest that empower employees add positive benefits for the company such as job satisfaction, better outcomes for customers and greater adaptability. Promote teamwork within the company can enhance employees ability to deliver excellent service. Working in a teamwork environment alleviates some of the stress, frustration and strains (ZEITHAML; BITNER, 2002). Internal support system is crucial for service workers be efficient and effective. To measure internal service quality it is important to encourage internal service relationship. Internal audit is one strategy used to identify their customers and needs, and to measure how well they are doing and from that make improvements. It is also important to make a clear linkage between what is being delivered internally and how this service is delivered to the final customer. Provide supportive technology and equipment can help employees do their job more effectively and efficiently. Organisations must develop service-oriented internal process with customer value and customer satisfaction in mind. One tactic to retain the best people would be to include employees in the company s vision. The employees will remain motivated and dedicated to the company s goals. If employees feel valued and treated as customers, they are more likely to stay with the organisation. If an organisation wants the best people it must reward and promote them utilising reward system linked to the organisation s vision. IM has increasingly been seen as a method of developing some form of consent between employer and employees, which can be achieved via communications and participant s mechanisms (PALMER, 1994) A true IM encompass all the HRM strategy such as motivation, consent and participation. The task of management is to get employees morally involved with the service, which they help to produce (PALMER, 1994). The internal market must be reached efficiently in order to prepare employees to build interactive relationships with external customers (GUMMESON, 1999). According to Groroons (1981) effective service delivery requires motivated and customer-conscious employees. Proctor (2000) suggests that the aim of the IM is to fulfil needs of employees. Employees need to be assured that their needs have been met before they can show concern for meeting customers need. Employees are motivated to perform well if they have good working conditions and a sense that they are important and contribute for the company performance (CHRISTOPHER; PAYNE; BALLANTYNE, 2002). Apart from Berry and Parasuraman (1991) idea of a link between employee s satisfaction and customer satisfaction they also established the concept of employees being customers of a firm. Sasser and Arbeit (1976) espouse the idea that the employees are the first markets confirm this. To sum up as a number of writers have suggested that if employees of the organisation are viewed and treated as internal customer they will be able to provide good service for external customers through an effective marketing behaviour. 4

5 Those employees who are capable and interested to give good service must be developed, motivated and retained treating them well and as important people (KANTER, 1983). However some authors such as Guaspari (1991), Mudie (1987) and Howe et al (1992) do not completely agree on too much focus on internal customers. They suggest that in practice managers require servility rather than service orientation. 5. Achievement of Goals According to Thomson (1990) the needs of the organisation and the needs of individuals are different and the key element in this process is to match the needs of both organisations and individuals avoiding meeting the needs of one to the disadvantage of the other. The same author believes that it is impossible to meet the needs of employees for this it would be necessary to pay them millions a year. In this way if training is sufficient to motivate the employees it is not necessary to through more money at them. Additionally, he suggests that the goals of the IM are to maximise relationship, maximise resources and match the needs of the organisation and the individuals. The IM of an organisation helps to maximise the relationship providing a common language between employees and the external marketing. In addition to make sure that the business s resources are operating in harmony to achieve the organisation s strategic goals. Gilmore (2000) also believes that the purpose of IM is to get the employees involved in the organisation s mission, goals and objectives. Mission statements are often based on the founding values of entrepreneurs, although increasingly generated by professional managers with an eye to internal and external stakeholders (LYONS; SUFI, 2003). In addition, mission statement can serve as an important tool for communication within the organisation (for employees) and outside the organisation (customers). Firm objectives must be configured to give stakeholders a measure of satisfaction. Campbell and Tawadey (1992) suggest that mission is made real only when it affects the behaviour and guides the people s actions. They also argue that strategy contains the message about what should be achieved. To conclude it is essential to gain the support and commitment of the people inside the organisation to achieve the goals and implement the plan of the company (JOBBER, 1998). 6. Human Resource Management (HRM) and Internal Marketing (IM) Palmer (2001) suggests that the role of marketing and Human Resource Management (HRM) is to achieve organisational goals by satisfying customers need. IM requires the involvement of a number of departments working together, especially the personnel and marketing. A study by McGregor (1960 cited PALMER 2001, p. 361) showed that IM culture is based on mutual trust, holistic supportive relationships, commitment, loyalty and motivation. This approach as part of HRM functions emphasises the importance of developing and encouraging employees to participate within the organisation. IM is dependent on supporting HRM policies and at the same time can be used by management to propagate core organisational values throughout the firm (PALMER, 2001). In this research, the distinction between IM and HRM practices is out of scope. Considering recruitment, selection, retention, appraisal, development and participation as part of corporate strategy designed to improve efficiency and profitability, IM techniques together with HRM techniques could be used to achieve the organisation objectives (PALMER, 2001). For an effective implementation of IM programmes, it is necessary close co-operation between the HRM and marketing functions with the purpose to increase inter-functional integration and to reduce inter-functional conflict (RAFIQ; AHMED, 2002). 5

6 Gilmore (2000) draw attention to some of the more common barriers of IM in an organisation. - Resistance to change: resistance of management and employees to change and consider new ideas. Fear of loose their power, control and job security. - Inter-functional conflict: people from different department have different point of views, priorities and emphasis about one topic. This can cause inefficient performance within the organisation. - Intra-functional conflict: intra-functional conflict occurs where there are not many promotions available or career opportunities causing a very competitive work place. Another reason would be the different goals, desires and ambitions of each individual. Those conflicts can lead to a poor communication and avoidance of interaction as share of ideas. - Lack of individual responsibility: lack of individual responsibility in an organisation happens when managers are unable to take new decisions and actions. Individuals need to understand clearly their duties and responsibilities. Manager s duties are usually involved with designing plan and implementing new activities. As has been mentioned there are several barriers to the acceptance of IM. The implementation of IM cannot rely on organisation structure alone. Changing in organisational purpose has a considerable impact on decision-making. The use of networks is crucial for an effective IM. 7. What is a Multinational Company (MNC)? A simple definition given by Hollinshead et al (1999) is that MNC are enterprises that in more than one country own or control production or service facilities and activities that add value. Multinational, global, transactional and international are some of the terms used to refer to MNC. Several international companies have international divisions to handle all their international activity (KOTLER, 2000). The international division is divided into president division and corporate staff division (ibid.). The international corporate staff division is formed by functional specialists who provide services to various operating units. Operating units can be organised in geographical organisations, world products group or international subsidiaries. A few global organisations provide training in world-wide operations for their executives. Managers are recruited from different countries, and suppliers as well as investments are obtained at the least cost and greater returns respectively. As can be seen, these companies face several organisational complexities. In order to overcome some of those problems it is essential a good IM programme. The management of MNC can not look only at financial performance but also at how to provide high servicequality for their customers and this can be obtained through IM. The research will try to achieve the objectives of this study already mentioned after achieved those objectives find out which benefits of the IM the companies intend to accomplish. The writer will look at MNC in Brazil to decipher which approach they tend to take. Additionally, which IM practices are used by MNC in Brazil? Which advantages do they see in implementing IM in a company? Do they use communication techniques to disseminate the companies objectives or motivational programmes for the employees get involved in the companies goals or both of them. 8. Methodology 8.1 Data Collection As can be seen, observation and interviews are not possible for this project. Unfortunately, the author has not got an opportunity to be a participant in a MNC in Brazil in order to experience the matter or use interviews of any type. On the other hand, questionnaires 6

7 were feasible for the primary data collection of this research, which used standardised, questions where could be interpreted in the same way by all respondents. As this research is part descriptive, questionnaires were used to identify which IM practices are used by MNC in Brazil. This enabled the researcher to identify and describe the variability in different phenomena. The main advantage of using questionnaire was that it allowed standardising the questions and the response categories so that every participant to the research could respond in the same way. The questionnaire design is a process that must be very carefully considered through and should be designed to gain the most useful and reliable responses. When designing the questionnaire used in this piece of research, the questions were given much consideration in order to make sure that they would generate the data that was needed to answer the research questions. The questionnaire was designed after the literature had been examined to give the author the best possible knowledge of what the same want to discover. The differing structure of the questions was used primarily to obtain the most useful answers. Thus, using different types of questions the respondents are kept interested and encouraged to think carefully about their answers. Question types were also another issue that the author was aware about. A primary distinction is between open and closed questions. Closed questions are the ones where the choice for response is fixed, the order of the questions should be followed and the respondent can only choose the one that closely matches his/her opinion. On the other hand, open questions allow the respondents to answer in their own words (EASTERBY-SMITH et al, 1991). A quantitative questionnaire using closed-ended questions and open questions based on the literature review were designed and ed to 100 companies in Brazil. A questionnaire aimed at Marketing and HR managers finding out about the companies IM practices and their perception about IM. The choice for a self-administered questionnaires, which are delivered and returned electronically by , according to Saunders et al (2000) are usually completed by the respondents. In addition offers a greater control being the users who read and reply to their own thus increasing reliability. Having in mind that the respondents were people holding important positions in the organisations, meaning tight time schedules, a questionnaire sent by was the method used for data collection. The questionnaire consisted of 14 questions. 12 questions where the respondents were required to click the answer which he/she believed the most appropriate. 10 of those questions were rated on a 5-point rating scale (Likert Scale) with responses ranging as 1 = agree, 2 = tend to agree, 3 = not sure, 4 = tend to disagree, 5 = disagree. The Likert technique was used to present a set of attitude statements. Subjects were asked to express agreement or disagreement of a five-point scale. That scale was shown to respondents, who were then asked to indicate how they would rate their perception of each key theme. Two of those questions, also indicative questions, were to choose some IM practices used by the company and there is also a space to specify any practice not pointed in the list. The last two questions consisted of open questions, to examine the perception of the respondents of IM, regarding one of the objectives of this research. The researcher ed a follow-up two-weeks after ing out the questionnaires, which thank early respondents and reminded non-respondents to answer (COOPER; SCHINDLER, 2003). 8.2 Sample Frame and Sample Size Some of the reasons for choosing this particular research area were due to the international perspective of the dissertation. As a result, the author decided to use multinational companies operating in Brazil. The sampling frame was taken from a trade 7

8 directory, called Directory of Multinational where most MNC are listed. The Directory of Multinationals profiles the world s largest corporations during 1999/2000. Although the Directory cannot be regarded as a complete census of large multinational corporations, the companies described do represent a concentration of wealth and control unparalleled in the development of the international economy. The researcher is aware that the sampling frame is unbiased, complete and accurate. The author decided to send one questionnaire for each company by companies was the total researched. The researcher followed the sequence of companies from the total number represented in the Directory of Multinational and identified 100 companies which are operating in Brazil. This survey intends to approach marketing managers at 100 randomly selected MNC in Brazil in order to maintain a good level of representation. Those companies will be from different industries as well as have been established in Brazil in different periods of time. The target sample for each company was included the Marketing manager or HR manager. In order to gain access some strategies were used: -Provide a clear account of the purpose and type of access necessary; -Provide a cover letter with the questionnaire; -Identify possible benefits to the organisation; -Use of suitable language. Portuguese and English will be used in the questionnaire and the respondent will have the choice of which language they prefer to answer. The researcher is aware of a serious issue to be considered is confidentiality and anonymity in the ethical aspect. Particularly in the way that the data in this research was collected it was . Any action, which could infringe the right of confidentiality and anonymity, was definitely avoided (SAUNDERS et al, 2000). At the beginning of the questionnaire respondents were informed of how the data would be used and that their confidentiality would be respected if required. To conclude the key point to consider is the need for consistency between the research question and objectives, the strategy to be employed and methods of data collection. 9. Data Analysis and Findings This survey took place from the 27 th of August until 27 th of September of The survey, which is going to follow in this analysis is survey. This kind of research has appeared since advent of the internet which is very convenient and with low cost. However, it has low response rate (30%) according to Finn (2000). The researcher sent 100 questionnaires by to Marketing and HRM managers of MNC operating in Brazil. The final questionnaires feedbacks were 19 questionnaires which correspond to 19 % of response being even lower than what Finn (2000) suggested. Initially, 10% responded, and after two weeks follow-up was ed to remind the companies that not yet had answered and than, 9% responded. The companies that responded are from different market segment as well as nationality and size. The aim of this chapter is firstly to present the research findings per question posed in the questionnaire and show the outcome of the data analysis. Secondly the aim is to draw any meaning from the statistics and the conclusions that have been checked towards the position taken by the writers in the field. Part one was employed questions regarding the company s information as company s segment, quantity of employees and annual turnover. The presentation of company s information starts with figure 1 which shows the distribution of the respondents by annual turnover in Brazilian currency called Real (R$). 8

9 ANNUAL TURNOVER NUMBER OF COMPANIES Figure 1 - Companies by annual turnover The number of employees in the 19 companies researched varies from 271 to employees. The researcher divided the companies in 10 different market segments, as follow: banks and financial services (5,26%), hotel services and tourism (5,26%), electronic and mechanic (10,53%), retail (5,26%), food and drink (15,79%), pharmacy, hygiene and cosmetics (15,79%), building material (5,26%), automotive (10,53%), technology (10,23%) and chemistry and petrol chemistry (15,79%). This first statement was given to respondents in order to get a general picture of the employees involvement in the organisation. In addition, it gives a basic idea of the internal communication within the company. Therefore, the respondents were asked to rank their perception of the employee s knowledge about the company s mission. From 19 MNC researched, 14 (74%) Agree with the statement that the employees in those companies know about the organisation s mission. (26%) 5 organisations tend to agree with the same statement. From those primary data it can be assumed that there is presence of internal communication in those companies. As it was mentioned in the Literature Review, Gilmore (2000) argues that the purpose of IM is to get the employees involved in the organisation s mission, goals and objectives. It seems that the MNC researched use the purpose of IM with their employees to involve them in the organisation s mission. The second question offered to respondents five options about motivational programmes offered to its, two of them there is a space to specify it. 89% or 17 companies offer Reward Incentives to its employees. 100% or all the 19 companies offer Training. 32% or 6 companies offer Stock options. 100% or the 19 companies offer Benefits in which are included private pension plan, health and dental plan, life insurance, loan, transportation, food voucher, education help, scholarship, language course, free medicine, and flexible hours. 74% or 14 companies chose the option Others where they could specify others motivational programmes offered by the company to its employees. In the option Others they specified as a motivational programme the social responsibility of the company in which employees can also get involved. And the programmes of balance (work and personal life) offered by the company. Company s social responsibility has not been mentioned in the literature researched as a motivational programme. However in this survey showed to be a popular motivational programme among the MNC researched. All the 14 (74%) companies have a social 9

10 programme to help poor people or the environment. Parties, concerts, dinners, barbecues to commemorate good results were also mentioned. From this question it can be assumed that the MNC researched invest in motivational programmes for its employees. It means that the companies intend to make their employees happy and satisfied with their job. This confirms Proctor (2000) suggestion that employees need to be assured that their needs have been met before they can show concern for meeting customers need. Those companies might offer those motivational programmes aiming for the company performance. According to Christopher, Payne e Ballantyne (2002) employees are motivated to perform well if they have a sense that they are important and contribute for the company performance. Satisfying the needs of people at work it creates an organisational climate in which people work enthusiastically and effectively. As a result, the organisation achieves it goals. The employees are able to register complaints to alert top-level management. This statement was given to respondents in order to investigate the internal communication and accessibility of the top-level management. The respondents had to rank their opinion about this statement. Ten companies (53%) Agree with the statement above. (37%) 7 companies Tend to agree with the top-level management accessibility. 1 company (5%) is not sure with the statement, and then (5%) 1 company disagree with the statement. From this data it can be accepted that the internal communication in the majority of those companies researched it flows from the bottom to the top level also. In addition, it demonstrates that those companies are aware of the importance of a well-managed internal communication. Well-managed internal communication does not mean that must always be top-down. It can be bottom-up and lateral communication too. Employees with free access to top-level management, and well-informed, feel important and motivated to achieve business goals. The accessibility of top-level management can be an IM strategy in order to enhance the relationship within the organisation. During the questionnaire, it can confirm this when the respondents declare the use of breakfast, lunch and dinner between leaders and employees, telephone line to allow employees to contact direct top-level management, and internal radio as communication techniques to make the information flow with more intensity within the organisation and avoid any communication gap. The results from the MNC researched concerning the perception of Marketing and HRM managers about whether or not the employees are encouraged to innovate and participate by suggesting new ideas. The findings mainly indicate that the MNC operating in Brazil encourage its employees to be innovative and contribute with new ideas, as it accumulates 84% of Agree, 11% of Tend to agree responses, and only one company (5%) Tend to disagree with the statement above. It can be assumed that in most of the companies researched, employees participate and are encouraged to innovate. In addition, in order to have an innovative atmosphere IM practices are used to facilitate the right environment. One way to gain competitive advantage is providing value and wining customers is improving innovation. This can be confirmed by Ahmed and Rafiq (2002) when they say that IM plays an important role in managing the company for innovation through understanding in-depth employee behaviour and the workplace environment. In order to explore the managers knowledge and familiarity with the term Internal Marketing and to analyse whether or not the company is concerned about internal customers expectations and perceptions an statement was delivered to investigate about it. Most of the respondent s 53% or 10 companies Agree with the statement. (37%) 7 companies Tend to Agree and then (11%) 2 respondents Tend to disagree. It seems that the companies researched present familiarity with the term Internal Marketing and that they give attention to employees perception and expectation. 10

11 Ahmed and Rafiq (2002) believe that IM research allows the leadership to listen to the internal organisation which will identify the type of things need to be promoted, different employee segment and gaps. Thomson (1990) also agree with the fact that opening up communication channel people are being targeted with the information they need, as a result, they will feel more important and satisfy their needs. As also mentioned by Proctor (2000) continually practising IM research is a method of implementing IM within the organisation. The writer believes that there are questions and statements correlated. On purpose to investigate if MNC operating in Brazil use some IM strategies such as retain the best people and also a way to motivate employees by offering a career opportunity within the company, 89% (17 respondents) voted Agree, about 11% (2 respondents) Tend to agree which presents a rather positive image. The result demonstrates the concern of those companies with its employee s motivation. In addition it show signs that those companies use Internal Marketing practices to attract and retain people, internal customers. Some IM strategies are suggested by Zeithaml and Bitner (2002) such as hire the right people, develop people to deliver service quality, provide the needed support system and retain the best people. If an organisation wants to retain the best people it must promote and reward them. If many promotions are not available or careers opportunities occur an intra-functional conflict (mentioned by Gilmore, 2000) causing a very competitive work place In order to find out which techniques are used to improve communication or disseminate information within the organisation a question was offered to respondents seven options, where they could chose which techniques are used in the company. One of the option, give opportunity to the respondent to specify in case it has not been mentioned. As can be seen from the graph 4.9, 84% (16) respondents) use Intranet as one of their communication techniques, Internet is widely used all respondents (100%) chose this option. Staff manuals are used for 53% (10 companies). Meetings as well as Notice board and Newsletter are extensively used by those companies. All respondents (100%) voted for those options. Every one chose more than one option and even some of them chose the option Other where they could specify other communication technique in practice in the company. It can be accepted that the companies researched invest considerably and believe in internal communication. It shows that the companies use new communication instruments as Internet, Intranet and . Brannan (1998) believes Intranet can be an excellent tool for internal communication and IM to achieve this interaction. The same author also says that Intranet is clearly beneficial in terms of cost, speed and facilitates internal communication. In doing this, the employees feel motivated, part of a team, and can also ease transition and cultural change where they are given the opportunity to talk about any issue related to the company. Despite new technology enables quicker sharing of information Gummesson (1999) argues that personal contact is crucial and will never be obsolete. Harshman and Harshman (1999) believe that internal communication is a crucial factor influencing how well organisations perform. With the purpose to explore whether or not the companies have internal auditing to measure organisational performance, the writer has designed this statement. As most of the questionnaire this was a 5-scale type question. The highest percentage 63% (12 respondents) is aggregated in Agree which means that those companies have internal audits to measure organisational performance. 21% (4 respondents) Tend to agree with the above statement. 16% (3 respondents) confessed Tend to disagree with the statement under discussion, which probably means that those 16% have not internal auditing to find out about their organisational performance. 11

12 Internal audit is defined by Zeithaml and Bitner (2002) as one strategy used to identify their customers and employees needs and to measure how well they are doing and from that make improvements. The responses show that most of the companies are using internal audits. From this can be assumed that these companies that use internal audits make a clear connection between what is being delivered internally and how the service is delivered to the final customers. A question was exposed in order to investigate if the companies apply marketing tools and concepts to its employees. This question follows the same structure, 5-scale type question. The respondents whose answer Tend to agree 47% (9 respondents) were more than they whose answer Agree 32% (6 respondents). 11% 2 of the respondents are Not sure if the company uses marketing tools and concepts internally and 5% (1 respondent) said Tend to disagree as well as Disagree, only 5% (1 respondent). Baker (1999) and Jobber (1998) consider that IM programme can be put into the same terms as the conventional external marketing programmes. Using the example in the question Jobber says that IM should begin with marketing segmentation which will classify internal customers in three distinct target groups: supporters, neutrals, and opposers. A question was also related to internal communication and employee participation. It is proposed to find out whether or not the companies encourage employees to give suggestion for changes focusing in improving the level of customer service. Again is a 5-scale type question. The responses were concentrated in the first two options 74% (14 respondents) voted Agree and 26% (5 respondents) of the survey sample said Tend to agree. It can be assumed that those companies encourage its employees to participate their suggestions which are an optimistic sign to increase commitment, innovation and motivation within the company. This is confirmed by Piercy (1992) who argues that IM of the company is a tool to make changes necessary for their external strategy to be effective. Christopher, Payne e Ballantyne (2002) also believe that IM is a strategy for developing relationships between internal members in order to enhance external market place performance. The intention of the research in the question 11 it was to investigate if the employees are taught why they should perform certain tasks and not just how. The highest score it was Agree 74% (14 respondents) followed by Tend to agree with 21% or 4 respondents. And then, Tend to disagree with 5% (1 respondent). It shows in the graph below. It seems that the companies researched invest in their employees and attribute value to them, probably in order to get well-performed workforce. Gilmore (2000) says that individuals need to understand clearly their duties and responsibilities. Employees need to know exactly what they have to do and why in order to get involved in the company strategy. A question was delivered to the respondents with the purpose to explore how employees are seen in the company. To know if the company has an Internal Marketing view. Most of the respondents said to Agree with the statement 63% (12 respondents), 5 respondents (26%) of the survey sample preferred to say Tend to agree. However, 2 respondents (11%) argued they are Not sure if this statement apply to the companies where they work. It can be assumed that most of the companies researched apply in some extent Internal Marketing in the company and that its employees are seen as real customers, internal customers. Sasser and Arbeit (1976) espoused the idea that the employees are the first market. Berry and Parasuraman (1991) and Kanter (1983) pointed out that if employees are viewed and treated as internal customers they will be able to provide good service for external customers. As Zeithaml and Bitner (2002) says in order to retain the best people, companies must value and treat employees as customers. 12

13 The last two questions of the questionnaire are open questions and is trying to find out the managers perceptions of IM. In the first open question (Question 13) the researcher asked what the respondent understands by IM or Endomarketing as it is known in Brazil. The answers had different approaches. About 32% (6 respondents) agreed that IM is all marketing actions glared towards inside the company to satisfy employee needs. One of the respondents poetically stated that IM is the art to enchant internal customers. This approach can be supported by Berry (1981) and Varey (1995) who believe IM is management way of dealing with employees where employees are seen as internal customers, job as internal products that satisfy the needs of those internal customers. Greene et al (1994) confirm this when he define IM as applying the philosophy and practices of marketing to the people who serve the external customer so that the best possible people can be employed and retained and they will do the best possible work. Greene et al (1994) also says that most management are not accustomed to thinking of marketing in this way. However the research does not completely agree with this as the findings shows a relevant number of respondents who agreed with using marketing practices internally. The focus on employee satisfaction can largely be attributed to the notion that to have satisfied customers, the firm must have also satisfied employees. The values of treating employees the way you would want them to treat the customers. Consequently, attraction of the best personnel, their retention and motivation becomes of critical relevance. On the other hand, 42% (8 respondents) believe that IM is a management tool to increase internal communication. A respondent comment IM makes the internal communication clearer transparent and efficient among the collaborators. An effective internal communication helps increase job satisfaction, safety, productivity, and profits and decrease absenteeism, grievances and turnover. This approach is confirmed by Gummenson (1999) who states that IM must be interactive. Harshman and Harshman (1999) also agree with the fact that internal communication is a crucial factor influencing how well organisations perform. The understanding of IM by 26% (5 respondents) has a customer orientation approach which agrees with Gronroos (1981) suggestion that IM is a method of motivating personnel towards customer consciousness and sales mindedness. This is well explicit by one of the respondents who stated: IM is creating job satisfaction, motivating employees to deliver high quality service to our customer. The last two approaches are connected according to Gronroos (1981) when he emphasise getting more motivated and customer conscious staff at all levels of the firm by improving open two-way communications and coordinating tasks between front line and support staff. The last question (Question 14) is: Which advantages, if any, you see in a company that adopt IM practices? Respondent s opinions were focused at: motivate employees; the collaborators has assess to changes, news, strategies making the employees feeling important, involved, motivated; promoting interpersonal relation improvement and nice organisational atmosphere; promote and assure the culture and strategies of the company; makes employees able and willing to deliver quality service; increase internal communication; satisfy and retain quality personnel in order to deliver high quality service to customers. Those are advantages of IM practices mentioned by managers. It can be supposed that the respondents believe that IM advantages are employee motivation, increase of internal communication, customer satisfaction through offering high quality service. The analysis makes apparent that IM is active and has been implemented as part of internal communication and motivation programmes. Besides that the managers perception 13

14 of IM comes into view that they are familiar with the importance of IM for the company.the results, shows a positive indication that the companies researched, make use of IM practices. 10. Conclusion This research has been about IM practices in the MNC operating in Brazil. This concluding chapter describes the main findings from the study regarding the research objective, and discussing how the objective has been met, in addition, it also provides a framework for potential future research. The limitations of the study have been clarified and some reflections of personal learning are also provided in this section. Remembering the aim of this study, it is important to take into account every result of the discussion to the aim per se. The aim of this research is to compare differences in approach and attitudes to IM among MNC operating in Brazil. Internal Marketing (IM) is the main subject of this paper and its importance and justification for why this project was meaningful to be carried out has been mentioned in the introduction chapter. In the Literature Review has been revealed different approaches of the definition of IM as well as its benefits providing an understanding of the topic under discussion. To facilitate the achievement of the aim and objective established in this paper a questionnaire was designed intending mainly to investigate IM practices and attitudes used by MNC in Brazil. The key people elected to answer the questionnaire were Marketing or HR managers working in those companies, believing that those people have the right knowledge in this matter. From 100 companies only 19 replied to the questionnaire. However, the researcher managed to create a general picture of IM practices employed by MNC operating in Brazil. In order to be successful in the actual global market companies must view their personnel as a source of competitive advantage. For this reason, this paper suggests IM as tool to be practiced within the company with the purpose to use the benefits acquired to achieve its goals and objectives. By searching e-journals, articles and books mainly services marketing and relationship marketing literature the author described some IM benefits. Such as Increase customer satisfaction, Increase employee satisfaction and motivation, Achievement of goals, Improvement of internal communication, Innovation, knowledge management and learning behaviour and empowerment. Some IM implementation approaches are also suggested. The literature also revealed that IM requires the involvement of a number of departments working together, especially the HR department and Marketing department. Analysing the responses it can be assumed that communication techniques and motivational programmes are largely used by the companies researched as IM practices. It makes clear the concern of the companies in keeping an intense internal communication for dissemination of information such as changes, strategies, goals and employee feedback. Furthermore motivational programmes are widely utilised by the companies to satisfy employees and consequently achieve the companies goals. IM attitudes within the organisation researched such as IM research to measure internal customers expectation and perception, encouragement of new ideas, career opportunities, internal audits and employee suggestions in general, were mostly agreed by the respondents to be used in the companies. The companies studied are from 10 different market segments. It appears that despite being from different market sector the companies use similar IM practices to motivate and communicate with its employees. However, managers of those companies, respondents of this research, revealed to have different perceptions of IM. The findings show that the companies researched use communication techniques, and motivational programmes. As a result, it can be assumed that they have an Internal Marketing 14

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