chapter  2
The basic concept of internal marketing
Pages 23

This chapter discusses internal marketing's background, definition, concept, and scope. It clarifies the theoretical significance of treating organizations as internal markets based on transaction cost analysis. Four aspects of internal marketing include internal marketing mix, strategic internal marketing, processional internal marketing and internal relationship management. Based on goal incongruence and performance ambiguity, Pitt and Foreman divide the internal market, whose constituents are an organization and its employees, into four types: the impersonal market, the relational market, the impersonal hierarchy, and the relational hierarchy. The chapter examines the relationship between internal customers and internal suppliers within an organization's business systems, and looks at their roles in various internal segments and the kinds of interactions that take place. Piercy and Morgan argue that an internal marketing program should target specific segments inside the organization to complement its external marketing program. Using the value chain framework, Porter presents a view that internal suppliers exist for each internal segment that has specific needs.