The impact of internal and external market orientations on firm performance.

Abstract

The role of internal marketing in developing organisational competencies is identified as a key area for
continued research (Rafiq and Ahmed, 2003). One competence of particular interest to marketers is market
orientation. This paper examines the impact of internal marketing, operationalised as a set of internal market
orientated behaviours (IMO) on market orientation (MO), and consequently organisational performance, and
provides the first quantitative evidence to support the long held assumption that internal marketing has an
impact on marketing success.
Data from UK retail managers were analysed using structural equations modelling employing LISREL
software. These data indicate significant relationships between internal market orientation, employee
motivation and external marketing success (market orientation, financial performance and customer
satisfaction). Our results also support previous findings indicating a positive impact of external market
orientation on customer satisfaction and financial performance. For marketing practitioners, the role of
internal market orientation is developing marketing strategies is discussed.