The Effect of Internal Marketing on Service Quality: An Empirical Study of the Banking Industry in Ethiopia
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Date
2019-05
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Addis Ababa University
Abstract
The purpose of this paper is to explore the effect of internal marketing on service quality in the Ethiopian banking industry. To investigate such effect, most commonly used dimensions of internal marketing which was communication, motivation; training and job satisfaction have been identified and used within this study. The research is designed as descriptive and explanatory and the research approach followed is quantitative. The target population of the study was employees of the four selected banks i.e. CBE, Awash Bank, CBO and ADB. The data was collection through structured questionnaire. Several analytical techniques were used to assess the relationships among the variables under investigation such as Pearson correlation, multiple regressions. The application used to analyze and examine the hypotheses is the SPSS V20. The findings of this study have shown a significant effect of internal marketing dimensions on service quality at the level of (α ≤ 0.05). The entire IM dimension in this study was positively correlated with service quality. The regression result shows that the adjusted R Square value was .555 and this implied that IM dimensions (predictors) accounts for 55.5% of the variation in service quality which is significant and 44.5% are other extraneous variables that can affect service quality. Only communication, training and job satisfaction are predictors of internal marketing with beta value of .314, .242, and .116 respectively that have positive contribution for the variation in service quality. Therefore, it is recommended for Ethiopian banks to fully implement internal marketing principles to increase service quality as it is one of the competitive advantages banks could have over their competitors’ in the industry.
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internal marketing, service quality, communication