Abstract
Abstract : Due to the growth of the service sector globally, there is constant demand for superior service quality and customer satisfaction, specifically within banking. Competitive pressures in the banking sector due to more intense competition, changes in government regulation and advancements in technology, are forcing banks to find new ways to remain competitive. One way banks can achieve this is through the power of people and the use of internal marketing practices in order to enable employees to deliver superior service quality and customer satisfaction. Internal marketing is a relatively new concept in the Middle East. Most internal marketing models and theories have been applied and tested in mature Western markets and very limited research has been conducted in Middle Eastern markets and no research has been conducted in Oman. The banking sector in Oman is currently the second largest contributor to the economy after oil and gas, contributing 37% to the country’s GDP. Islamic banking was first introduced into the country in 2012, and since its inception, the Islamic banking has been growing significantly faster than conventional banking, currently owning 11.5% of total banking assets. Considering that Oman is a frontier market, the banking sector is not without its challenges, in particular from a service quality and customer satisfaction perspective. Given its employees who create the service experience, the employee as the internal customer becomes the organisation’s most valuable asset. Hence, banks worldwide are placing a greater focus on the enablement of employees to deliver service quality and customer satisfaction through an internal marketing strategy. A formal internal marketing programme aims to enhance employee satisfaction with the intention of motivating employees to go the extra mile to provide superior service to internal and external customers. This results in higher levels of customer satisfaction. This kind of strategy could work well within the Omani market, but very little evidence could be found to support or refute the notion. In order to investigate the influence of the internal marketing mix as enabler of employees’ ability to deliver service quality and customer satisfaction and in order to assess the validity of the conceptual model across Islamic and conventional banking, an empirical investigation was conducted. The primary objective was to determine the interrelationships between internal marketing and employees’ perceived ability to deliver service quality and customer satisfaction to retail banking customers overall, as well as for Islamic and conventional banking. A census approach was applied to the study using a combination of an electronic and a person-administered survey. A total of 627 respondents agreed to participate in the vii study. SEM was used to test the relationships in the study. Internal marketing mix elements considered to be enablers of service quality included internal promotion, internal performance management and internal purpose. When regressed onto service quality, internal product and internal price revealed a significantly negative relationship with service quality. The remainder of the internal marketing elements (internal people, internal process, internal physical evidence, internal political power and internal procurement) are not considered to be enablers of service quality. Internal marketing mix elements considered to be enablers of customer satisfaction included internal promotion and internal performance management, the remainder of the elements (internal product, internal price, internal people, internal process, internal physical evidence, internal political power and internal procurement are not considered to be enablers of customer satisfaction. Service quality is regarded as a strong influencer of customer satisfaction. Furthermore, the empirical findings revealed that differences exist between Islamic and conventional banking, specifically with regard to the relationships when service quality is regressed onto internal promotion, internal process, internal political power and internal purpose. Differences also exist with regard to the relationships when customer satisfaction is regressed onto internal people and internal physical evidence. Based on these outcomes, recommendations were made to retail banks in Oman for the implementation of a formal internal marketing strategy, in which the 10 internal marketing mix elements can be implemented in order to enhance employee ability to deliver superior service quality and customer satisfaction.
Ph.D. (Marketing Management)