Internal‐market orientation: a misconceived aspect of marketing theory

Purpose – Although many authors argue that practising marketing internally facilitates the implementation of the market orientation concept, systematic empirical research to explore the validity of the argument remains surprisingly scarce. Hence, the purpose of this paper is to investigate empirically the relationship between market orientation (MO) and internal‐market orientation (IMO) as well as their joint effect on customer satisfaction. Design/methodology/approach – The findings ground on data collected from dyads of financial services providers and their customers. The former provided the information pertaining to the company's degree of MO and IMO adoption as well as on perceived employee value, while the latter were asked about perceived customer value, perceived service quality and their satisfaction with their provider. In total 127 dyads are employed in the analysis. Findings – The findings show that MO and IMO are two inter‐related concepts, probably falling under the marketing philosophy umbrella. Through MO adoption, customer perceived value and customer perceived quality of the service increase. Through IMO adoption, the company improves the level of employee perceived value, which also results in higher levels of customer perceived service quality. Interestingly enough, IMO adoption is also found to have a direct impact on customer perceived service quality. Research limitations/implications – The major implication from the study is that adopting a market orientation does help improve customer satisfaction but this objective is better served when developing a more holistic view of marketing and trying to simultaneously offer value to other company stakeholders, such as the employees. The major limitation of the study is the focus on services. When it comes to manufactured goods, customers receive significant value from the tangible parts of the product and consequently further investigation is required before any generalization can be made on the basis of the strength of the relationships that this study reveals. Practical implications – The most significant implication for practitioners is the need to strike the right balance between the company's internal and external orientation. To achieve this, companies have to invest in integrating the marketing and the human resource functions, in much the same manner in which they attempt to integrate marketing with other company functions that also influence customers' experiences. Originality/value – This is the first empirical study to investigate the inter‐relationship and the joint effect of two well established notions, i.e. that between MO and IMO, and thus offers the required support to normative arguments regarding the need to sustain a balance between the company's external and internal focus.