From internal marketing to customer perceived relationship quality evidence of vietnamese banking firms

From internal marketing to customer- perceived relationship quality: evidence of Vietnamese banking firmsJong Hee Parkaand Thi Bich Hanh Tranb* a College of Business Administration, Unive

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Total Quality Management & Business Excellence

ISSN: 1478-3363 (Print) 1478-3371 (Online) Journal homepage: http://www.tandfonline.com/loi/ctqm20

From internal marketing to customer- perceived relationship quality: evidence of Vietnamese

banking firms

Jong Hee Park & Thi Bich Hanh Tran

To cite this article: Jong Hee Park & Thi Bich Hanh Tran (2018): From internal marketing tocustomer- perceived relationship quality: evidence of Vietnamese banking firms, Total QualityManagement & Business Excellence, DOI: 10.1080/14783363.2018.1446754

To link to this article: https://doi.org/10.1080/14783363.2018.1446754

Published online: 07 Mar 2018.

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From internal marketing to customer- perceived relationship quality: evidence of Vietnamese banking firms

Jong Hee Parkaand Thi Bich Hanh Tranb*

a

College of Business Administration, University of Ulsan, Ulsan, Republic of Korea;bDepartment

of Business Administration, VNU-Vietnam Japan University, Hanoi, Vietnam

This study seeks to investigate the effect of internal marketing – treating employees as internal customers – on salesperson’s engagement in customer-oriented selling behaviour and relational selling behaviour which in turn result in customer perceived relationship quality It also aims at examining the moderating role of service climate for employee relationship marketing behaviours The data were collected through surveys from dyadic interactions between salespeople and customers in banking firms

in Vietnam The results showed that internal marketing is signi ficantly associated with salesperson ’s customer-oriented selling behaviour and relational selling behaviour which are relevant to customer relationship quality In addition, service climate signi ficantly moderates the influence of internal marketing on salesperson customer-oriented selling behaviour; whereas, service climate does not serve as a crucial moderator for salesperson relational selling behaviour The study concludes with useful scholarly and managerial implications.

Keywords: internal marketing; customer-oriented selling behaviour; relational selling behaviour; relationship quality; service climate

1 Introduction

Nowadays, parallel to intense competition which enables customers to have more optionsfor their products and services, servicefirms have increasingly paid attention to maintainingrelationships with customers (Marshall & Johnston,2015) In the service industries, custo-mer perception of relationship quality with the contact employees plays an important role ininducing customer relationships with thefirms because customers perceive treatment of thecontact employees as treatment of the organisations (Hennig-Thurau, Gwinner, & Gremler,

2002) Perceived relationship quality has been linked to several positive customer outcomessuch as customer retention (Hennig-Thurau,2000), repurchase intention (De Wulf, Odeker-ken-Schroder, & Iacobucci,2001), positive word-of-mouth behaviours (Roberts, Varki, &Brodie, 2003), and customer loyalty (de Ruyter, Wetzels, & Kleijnen, 2001; Hennig-Thurau et al.,2002; Park, Kim, Dubinsky, & Lee,2010) Furthermore, a strong relationshipwith contact employees may reduce customers’ likelihood to be against organisation likecomplaining to other customers or complaining to external agencies (Hoyer & MacInnis,

1997) Customer perceived relationship quality with contact employees also promptsmore customers’ understanding when a service failure occurs (Reynolds & Arnold,

2000) Therefore, study of drivers for relationship quality is valuable for organisations toobtain several positive outcomes

Internal marketing – treating employees as internal customers – has been recentlystressed as an effective approach to achieving organisational goals (Kanyurhi &

*Corresponding author Email: tranthibichhanh@vnu.edu.vn or ttb.hanh@vju.ac.vn

https://doi.org/10.1080/14783363.2018.1446754

Akonkwa,2016; Rafiq & Ahmed,2000); however, little has been known about whetherinternal marketing is a strong driver for customer’s perceived relationship quality or not.This void in research needs to be addressed because apart from service quality that hasreceived remarkable attention from internal marketing scholars (Bansal, Mendelson, &Sharma, 2001; Aburoub, Hersh, & Aladwan, 2011), relationship quality is a differentapproach to explaining long-term outcomes (Hennig-Thurau et al.,2002) or an importantway that leads service businesses to success (Hsieh & Hiang,2004) According to Christo-pher, Payne, and Ballantyne (1991), organisation’s focus on relationship is vital to bringabout the desired delivery of value to customers From a different angle, the internal market-ing-relationship quality linkage has been partly captured in the studies of services market-ing triangle through the connection of internal marketing and relationship marketingbecause relationship quality is a principle component of relationship marketing (Pepur,Mihanovic, & Pepur,2013) Yet, the studies in this ground either conceptually proposedthe relation while lacking empirical assessment (Opoku, Opuni, & Adjei,2014) or evalu-ated relationship marketing as a general construct (Wu, Tsai, & Fu, 2013) Therefore,empirical study of internal marketing– relationship quality link will offer a deep insightinto the role of internal marketing for relationship marketing.

In addition, given the importance of relationship quality for business success and thenovelty of the exploration of the internal marketing– relationship quality linkage, research

on the influential mechanisms between them will be necessary to both the practical andscholarly field An extant review suggests that the most widely-studied mediatorsbetween internal marketing and customer– related consequences are attitudinal mediatorslike job satisfaction (Altarifi,2014; Bailey, Albassami, & Al-Meshal,2016) and organis-ational commitment (Tsai & Wu, 2011) Nevertheless, the inconclusive findings fromprior studies about these mechanisms (Altarifi, 2014; Bailey et al., 2016) suggest thatother strong drivers may account for the effect According to Bansal et al.’s (2001) prop-osition, the link between internal marketing and external customers-related outcomes isthe internal customers’ (i.e employees) behaviours directed at external customers, butthe study did not provide empirical assessment of the phenomenon Apart from thiswelcome example, little research, to date, has been dedicated to the mediating role ofemployee behaviours directed at customers in the relationship

In the era of relationship marketing, customer-oriented selling behaviour and relationalselling behaviour have been suggested as effective approaches to establishing and nurturinglong-term relations with customers (Bayaa, Goedegebuure, & Jones,2009; Franke & Park,

2006) Evidentially, Kim and Cha (2002) found from their empirical study that amongservice provider’s characteristics, these two behaviours have the largest effects on customerperceived relationship quality Regrettably, while prior studies have examined the effect ofinternal marketing on employee customer orientation (Rafiq & Ahmed, 2000; Yusuf,Sukati, & Chin,2014) and the impacts of employee customer-oriented selling behaviour,relational selling behaviour on customer perceived relationship quality (Crosby, Evans,

& Cowles, 1990; Lai, Chou, & Cheung, 2013; Liu & Leach, 2001; Stock & Hoyer,

2005), little research has directly tested the mediating role of employee customer-orientedselling behaviour and relational selling behaviour between internal marketing and customerperceived relationship quality The present study attempts to investigate the possibility thatthese behaviours are mechanisms between internal marketing and customer perceivedrelationship quality

Furthermore, if internal marketing is conducive to employees’ performance of mer-oriented selling behaviour and relational selling behaviour which later lead to customerperceived relationship quality, a question raised is whether the effects are significantly

custo-fluctuated by a viable factor To our knowledge, individual factors like salespersonempathy, expertise (Stock & Hoyer,2005), and salesperson gender and selling experience(Franke & Park,2006) have been widely studied as significant moderators for customer-oriented selling behaviour and relational selling behaviour On the contrary, the moderatingrole of specific types of organisational climate has been overlooked According to Burke,Borucki, and Hurley (1992), the two factors shaping employees’ perceptions of the workenvironment and so affecting employee behaviours include a focus on satisfying employ-ees’ needs (i.e internal marketing) and a concern for service quality for customers that ismanifested in a strong service climate Nevertheless, no studies have examined the possibleinteraction between the two factors for employee behaviours Drawing on social cognitivetheory (Bandura,1986) which portrays the influence of environmental or situational factors

on personal behaviours, the present study seeks to evaluate whether and to what degreeservice climate, as an environmental factor (Schneider, White, & Paul,1998), moderatesthe relationship between internal marketing and salesperson’s relationship marketing beha-viours Besides, service climate can be a promising moderator since it has been found to bepositively associated to salespeople’s satisfaction (Ram, Bhargavi, & Prabhakar, 2011)which may motivate them to engage in positive behaviours Also, there exists empirical evi-dence on the moderating influence of service climate for employees’ organisational citizen-ship behaviours (Sharif, Yaqub, & Baig,2015) and pro-social behaviours (Wang,2012).The Vietnamese banking context was purposefully selected for the study Since Viet-nam’s participation in WTO in 2006, a considerable number of foreign banks haveentered Vietnam, heightening the competitiveness (Nguyen & Nguyen, 2012) Accord-ingly, bankingfirms in Vietnam have faced a severe competition in several issues includingwinning, retaining customers and keeping talented staff Joint-stock commercial banks thataccounted for a major number of banks in Vietnam faced a tougher situation as they have acomparatively small capital and deposit base, and retail banking is a key source of theirprofits, akin to loans to small and medium enterprises Progressive practices like internalmarketing for motivating banking employees to serve customers and so sustaining relation-ships with customers are vital for these banks to survive and prosper Therefore, study ofinternal marketing and relationship quality on the sample of Vietnamese joint-stock com-mercial banks will not only represent a major population in Vietnam’s banking industrybut also be a timely research that is practically valuable for bankingfirms in Vietnam.The study’s main purpose is to investigate the chain effect of internal marketing onsalesperson’s engagement in customer-oriented selling behaviour, relational selling behav-iour and customer perceived relationship quality Its secondary purpose is to test whetheremployee relationship marketing behaviours mediate the linkage between internal market-ing and customer relationship quality It also aims at examining the moderating role ofservice climate in the influence of internal marketing on employee relationship marketingbehaviours In this way, the study may extend the current literature of internal marketingand relationship marketing by specifying the relationship between them Also, it mayupgrade the knowledge base of the role of employee relationship marketing behaviours.Finally, the study may provide useful managerial implications for organisations, particu-larly bankingfirms in Vietnam, to sustain relationships with customers

2 Theoretical background and hypothesis development

Social exchange theory (Blau,1964) has been well-known as a powerful theory to explicatehuman behaviours in a variety of contexts, including organisational environments It pos-tulates that when one party does a favour or something valuable for the other party, the

receiving party tries to reciprocate with something equally valuable (Shore, Tetrick, Lynch,

& Barksdale,2006) It is reasonable to interpret salesperson’s involvement in relationshipmarketing behaviours with customers resulted from internal marketing from socialexchange theory because internal marketing allows for harmonious social exchangesand increases salesperson’s satisfaction and motivations in their jobs (Ahmed & Rafiq,

2003) Social cognitive theory (Bandura,1986) holds that personal behaviour, cognition,and social environment are dynamically interactional or influence each other Its tenetthat individuals learn by paying attention to and emulating the attitudes, values, and beha-viours of attractive and credible models may lend support for the moderating influence ofservice climate for salesperson behaviours since service climate is an environmental factor(Li, Zhu, & Luo,2010) Henceforth, social exchange theory and social cognitive theoryserve as theoretical lens explicating for employee engagement in relationship marketingbehaviours in this study

2.1 Internal marketing and employee relationship marketing behaviours

Internal marketing wasfirst defined as ‘viewing employees as internal customers, viewingjobs as internal products, and then endeavoring to offer internal products that satisfy theneeds and wants of these internal customers while addressing the objectives of the organ-ization’ (Berry,1981, p 34) The concept has been studied from both management and mar-keting perspectives A considerable number of conceptualizations of internal marketinghave been proposed (Cahill, 1995; Lings & Brooks, 1998; Mudie, 2003; Rafiq &Ahmed, 2000) However, no consensus has been reached on the formal model andmeasure of internal marketing (Rafiq & Ahmed, 2000) A large proportion of researchviewed internal marketing as a strategy for job engineering to satisfy employees while asmaller group of studies conceptualised internal marketing as a mechanism to integratethe different functions that are vital to the customer relations of companies (Gounaris,

2006) Several studies have treated internal marketing as a uni-dimensional construct(Abzari, Ghorbani, & Madani,2011; Chang, Tseng, & Chen,2012; Vazifehdoost, Hoosh-mand, & Dehafarin,2012; Zaman, Javaid, Arshad, & Bibi,2012) These studies have gar-nered a keen interest in the mechanisms between internal marketing and outcomes For itspurposes, the present study defines internal marketing as a strategy and a marketing pro-gramme focusing on jobs that satisfy the needs of the employees It operationalises internalmarketing as a mixture of training, internal communication, empowerment, and manage-ment support (Altarifi,2014; Chang et al.,2012; Keller, Lynch, Ellinger, Ozment, & Calan-tone,2006; Lings & Greenley,2005) With a focus on the intervening mechanisms, it treatsinternal marketing as a single construct like prior research

From its presence, customer-oriented selling behaviour was defined as salesperson’spractice of the marketing concept by trying to help their customers make purchase decisionsthat will satisfy customers’ needs (Saxe & Weitz,1982) In accordance with this conceptu-alisation, salespeople with a high customer orientation have high concern for others andthemselves Conversely, salespeople with low customer orientation exhibit high concernonly for themselves and low concern for others (Schwepker,2003) Later, some definitions

of customer-oriented selling have been proposed by different researchers (Brown, Mowen,Donavan, & Licata, 2002; Stock & Hoyer, 2002), but the core meaning of customer-oriented selling has been consistent across studies (Schwepker,2003) Apparently, custo-mer-oriented behaviour connotes salesperson’s behaviours to meet customer needs injob-related environments or on-the-job contexts (Brown et al.,2002) Customer-orientedselling behaviour is characterised by the salesperson’s assessment of customer needs,

avoiding deception, avoiding high-pressure selling, describing products and services quately, and helping customers make satisfactory purchase decisions (Thomas, Geoffrey,

ade-& Ryan,2001)

Relational selling behaviour refers to acts or behaviours exhibited by sales tives to cultivate, maintain, and promote business relations with customers via mutual com-munications (Crosby et al.,1990) Crosby et al (1990) conceptualised relational sellingbehaviour with three main elements: interaction intensity, mutual disclosure of information,and willingness to cooperate However, later studies of services industry have focused ononly the two former because they were found more closely related to interpersonal relation-ships (Lin,2012) and significantly associated with sales performance while cooperativeintention was not (Boles, Johnson, & Barksdale,2000) Following the prior studies of ser-vices industry, the present study employed the conceptualisation of relational selling behav-iour with two dimensions including interaction intensity and mutual disclosure ofinformation Interaction intensity indicates the frequency of the communication with custo-mers either for a formal business meeting with selling tasks or just for personal reasons(Crosby et al.,1990) Mutual disclosure of information is the degree of sharing inside feel-ings and private information It connotes a sharing of information on both the personal andorganisational level (Crosby et al.,1990)

representa-In accordance with social exchange theory’s (Blau,1964) tenet, internal marketing with

an attention to employees’ needs creates strong motivations for employees in work whichmay prompt them to repay the organisation with something valuable Exhibiting customer-oriented selling behaviours to the organisation’s customers is one way to reciprocate to theorganisation because in doing so, they can retain more customers for organisations (Dunfee

& Gunther,1999) Moreover, practices of internal marketing engender salespeople’s ings of being cared by the company and management as their needs are highly met (Bell,Menguc, & Stefani,2004) Their frequent need fulfilment allows them to feel happy in per-forming their jobs, therefore enhances their responsiveness and effectiveness in satisfyingcustomers’ demands (Rafiq & Ahmed,2000) Former research has also showed empiricalevidence that internal marketing is positively relevant to customer orientation of salespeo-ple (Huang & Chen,2013; Yusuf et al.,2014; Zaman et al.,2012) As a consequence, wepropose:

feel-H1: Internal marketing positively in fluences salesperson’s performance of customer-oriented selling behavior.

Under the light of social exchange theory, when employees receive favourable treatmentfrom organisations like information resources resulted from internal communication, theyexhibit a desire to reciprocate favours toward their organisations (Cropanzano & Mitchell,

2005) Meanwhile, internal marketing helps to satisfy employees’ demands through the ation of harmonious exchanges between employees and organisations (Gounaris,2006).Exhibiting relational selling behaviours towards customers is one way of reciprocating tothe organisation because it helps to yield high and long-term profitability for the organis-ation (Bayaa et al.,2009) which is critical for the economic survival and success of mostservicefirms nowadays (Heskett, Thomas, Loveman, Sasser, & Schlesinger, 1994) Fur-thermore, with smooth communication, internal marketing enables salespeople to beclear about management’s desires and pursuits; therefore, they are more likely to exhibitrelational selling behaviours since nowadays’ firms tend to emphasise building and sustain-ing relationships with customers (Marshall & Johnston,2015) Hence, we propose:H2: Internal marketing positively in fluences salesperson’s performance of relational selling behaviour.

cre-2.2 Employee relationship marketing behaviours and relationship quality

Relationship quality refers to customer’s overall assessment of the strength of the sonal relationship with the contact person (Macintosh,2007) Many studies have treatedrelationship quality as a two-dimension construct of satisfaction and trust (Crosby et al.,

interper-1990; Macintosh,2007; Parsons,2002) Some studies stressed trust alone as a critical struct of relational exchanges (Doney & Cannon, 1997; Sirdeshmukh, Singh, & Sabol,

con-2002) A considerable number of studies suggested commitment as a significant dimension

of relationship quality (De Wulf et al.,2001; Dorsch, Swanson, & Kelley,1998; Thurau et al.,2002; Palmatier, Dant, Grewal, & Evans,2006; Wang, Liang, & Wu,2006).Other studies evaluated relationship quality with two dimensions including trust and com-mitment because they are both keys to predicting exchange performance (Morgan & Hunt,

Hennig-1994; Park et al.,2010) Relationship trust refers to customer’s confidence in the serviceprovider’s reliability and integrity (Morgan & Hunt,1994) while relationship commitmententails the willingness of customers to maintain the exchange relationship with the serviceprovider (De Wulf et al.,2001) The present study conceptualises relationship quality withtwo dimensions of trust and commitment, such that in a high quality relationship, customer

is able to rely on the service supplier and committed to prolong the relationship with theservice provider

Customer-oriented selling behaviours of salespeople may positively impact customers’perceptions of relationship quality for three reasons First, customer-oriented individualshave a desire and ability to assess and meet customers’ needs (Stock & Hoyer, 2002)while fulfilling customers’ needs is central to relationship success (Hennig-Thurau et al.,

2002) This is because customers are satisfied in their transaction with the salesperson(Kidwell, McFarland, & Avila,2007) Second, by providing adequate information aboutproducts and services while minimising pressure selling to customers (Brown et al.,

2002), customer-oriented salespeople cultivate trust among customers which helps tostrengthen the relationship (Beatson, Lings, & Gudergan,2008) Finally, customer-orientedindividuals have a desire for a long-term relationship with customers, so they may invest forrelationship quality (Stock & Hoyer,2005) When customer-oriented individuals have anexpectation of future transactions with customers, they invest more in building long-termrelationships Thus, we propose:

H3: Employees ’ customer-oriented selling behavior positively influences customers’ perceived relationship quality

The linkage between salesperson’s relational selling behaviour and customers’ perceivedrelationship quality has been well documented in the marketing literature Williams andAttaway (1996) and Liu and Leach (2001) inserted that the buyer-seller relationshipquality improves as the salesperson’s relational behaviours directed toward the customerincrease Likewise, Lin (2013) and Yu and Tseng (2016) found a positive relationbetween service provider’s relational selling behaviour and customer relationship quality.Crosby et al (1990) reckoned that interaction intensity and mutual disclosure of infor-mation produce a strong buyer-seller bond Similarly, Lagace, Dahlstrom, and Gassenhei-mer (1991) affirmed that frequent interaction can enhance mutual cooperation and improvethe relationship quality of both parties Chow, Wei, and Wang (2004) found that interactionintensity and mutual disclosure of information respectively impact customer satisfactionand trust Lai et al (2013) found the positive influence of relational selling behaviour onrelationship trust and satisfaction More recently, in a study on a large sample ofworking professionals, Bateman and Valentine (2015) also discovered that relational

selling behaviour could trigger increased customer trust in salesperson Therefore, wepropose:

H4: Employees ’ relational selling behaviour positively influences customers’ perceived relationship quality.

2.3 Employee relationship marketing behaviours as mediators

Internal marketing makes employees feel motivated and satisfied (Ahmed, Rafiq, &Norizan, 2003; Bell et al., 2004; Gounaris, 2006) In accordance with social exchangetheory (Blau,1964), they are likely to feel a voluntary obligation to reciprocate to the organ-isation by exhibiting relationship marketing behaviours to the organisation’s customersbecause these behaviours are generally valued by customer-oriented organisations(Bayaa et al.,2009) Employee performance of customer-oriented behaviour and relationalselling behaviour towards customers fosters customers’ trust and commitment to therelationships with employees since their needs are satisfactorily met This means that cus-tomers are more likely to perceive positive relationship quality with the contact employees

In addition, internal marketing with affordable opportunities for training and effective munications (Rafiq & Ahmed,2000) can enhance salespeople’s abilities to gather infor-mation of customer needs and to strengthen relationships with customers, and theseabilities may magnify the effectiveness of salespeople’s performance of productive beha-viours (Roman & Iacobucci,2010) like customer-oriented selling behaviour and relationalselling behaviour To illustrate, Choi and Joung (2017) provided empirical evidence thatcomponents of internal marketing including development and rewards are significantly con-ducive to employee engagement in customer oriented behaviour When contact employeesexhibit such relationship marketing behaviours towards customers, they may instil custo-mer trust to the employees because of customers’ perceived professionalism from theemployees Following the above reasoning, we propose:

com-H5: Employees ’ customer-oriented selling behaviour mediates the relationship between internal marketing and customers ’ perceived relationship quality.

H6: Employees ’ relational selling behaviour mediates the relationship between internal ing and customers ’ perceived relationship quality.

market-2.4 Service climate as a moderator

Service climate refers to employee perceptions of the practices, procedures, and behavioursthat get rewarded, supported, and expected with regard to customer service and customerservice quality (Schneider et al., 1998) To put it simply, service climate entails theshared sense employees in an organisation have, where policies, practices, and procedures,and the expected and rewarded employee behaviours emphasise service excellence(Bowen, Schneider, Donavan, & Licata, 2014) An organisation’s service climate isstrong when its employees perceive that they are favourably rewarded for deliveringquality service or when they have perceptions that customer service is a big concern formanagement Schneider et al (1998) examined service climate in relation to foundationissues of the organisation The study concluded that climate for service rests on the foun-dation issues, but foundation issues of the organisation are not sufficient for begettingservice climate Rather, service climate requires policies and practices that focus attentiondirectly on service quality (Schneider et al.,1998)

Internal marketing with proper attention to salespeople’s needs may satisfy them in theirjobs, thus motivating them to perform customer-oriented selling behaviour Under a climate

with a high concern about service quality, they may exhibit customer-oriented selling haviour more frequently because of two main reasons First, in accordance with social cog-nitive theory’s postulate, in an environment in which customer service is a concern and arewarded behaviour, salespeople expose to opportunities to observe and learn to providesatisfactory services to customers from other colleagues As a result, they may engagemore in customer-oriented selling behaviours to satisfy the customers Menguc, Auh, Kat-sikeas, and Jung (2016) purported that strong service climates evoke similar behaviouralresponses among service employees Linuesa-Langreo, Ruiz-Palomino, and Elche-Horte-lano (2017) purported that employees usually tend to adapt their attitudes and behavioursaccording to what they perceive in the work environment Second, in a strong serviceclimate, employees have shared perceptions of management’s concern about customerservice quality (Bowen et al.,2014) Therefore, they likely strive for satisfying customers’demands in order to provide better service quality to customers and thus meeting manager’sexpectations This is because employees usually want to meet managers’ requirements andconcerns (Van Vianen,2000) Bowen et al (2014) added that in a high service climate,employees are more likely to engage in customer-focused organisational citizenship beha-viours Previous studies provided supportive empirical evidence that in an environment inwhich customer service is a focal point, salespeople tend to follow suit and perform extra-role service behaviours (Wang,2012) and exhibit service behaviours towards customers(Hong, Liao, Hu, & Jiang,2013) Accordingly, we hypothesise:

be-H7: Service climate moderates the in fluence of internal marketing on employee oriented selling behaviour such that when service climate is high, internal marketing will have more positive effects on employee customer-oriented selling behaviour than when service climate is low.

customer-With smooth communications and extensive fulfilment of employees’ needs, internal keting engenders high quality social exchanges, therefore fostering employees’ perform-ance of relational selling behaviours A strong service climate may make thisphenomenon more pronounced for three main reasons First, in a strong service climate,employees are clear about manager’s concern about service quality to customers (Schneider

mar-et al.,1998) While they want to reciprocate to the organisation thanks to satisfactory socialexchanges and benefits received from internal marketing, they may strive to satisfy man-ager’s concerns of service quality by being more tactful in interacting with customersand investing in developing relationships with customers Second, under a serviceclimate, employees perceive that they will be favourably rewarded if they deliver qualityservice to customers (Bowen et al.,2014), so they may contact customers more often tomake customers more satisfied and disclose more information with customers to strengthenrelationships This is because employees know that the customers who are satisfied in therelationships may perceive higher service quality and have more understanding when aservice failure occurs (Reynolds & Arnold,2000) Third, in a high service climate, thenumber of employees who have job knowledge and skills to deliver high quality service

is higher (Schneider et al.,1998) In light of social cognitive theory, employees who areinclined to repay the organisation with positive behaviours thanks to receiving favourabletreatment resulted from internal marketing may observe skills of other competent col-leagues and so magnifying their skills in communicating with customers such as contacting,sharing information, and maintaining relationships with customers Linuesa-Langreo et al.(2017) found that service climate makes a significant contribution in enhancing employees’performance of positive service behaviours towards customers (e.g relational selling).Hence, we hypothesise:

H8: Service climate moderates the in fluence of internal marketing on relational selling iour such that when service climate is high, internal marketing will have more positive effects

behav-on employee relatibehav-onal selling behaviour than when service climate is low ( Figure 1 ).

3 Research methodology

3.1 Data collection instruments and procedure

The study collected the data from 44 branches of four bankingfirms in Hanoi, the capital ofVietnam Initially, out of 31 commercial joint-stock banks in Hanoi, based on accessibility,eight above-average-sized bankingfirms in terms of total assets were contacted for data col-lection Four of these banks showed willingness to participate in the research Then, of the

142 branches of these four banks in Hanoi, for two months, 44 branches were visited fordata collection These banks were targeted for three main reasons First, this studyfocused on dyadic interactions between front-line employees and customers while thisfeature is warranted in banking industry Second, due to growing competition in the arearesulted from foreign banks’ entries, these banking firms tend to focus on practices formotivating employees to satisfy customers like internal marketing Third, the competitiveeconomic environment also forces these banking firms to pay attention to relationshipswith customers The study employed two separate questionnaires for salespeople and cus-tomers to collect data The original items of these questionnaires were in English Theseitems were translated into Vietnamese through a translation-back-translation processbetween two professional translators Then, two pilot tests were carried out on a total of

25 sets of respondents Thefirst pilot test involved ten pairs of banking employees and tomers These respondents were required to complete the questionnaires and give their com-ments on design, content, wording, and layout Obscure or ambiguous items in thequestionnaires were revised under the consideration of customers’ provided inputs Afterconsiderable wording changes were made for clarity of the items, to check for the appro-priateness of the modified items, the second pilot test was carried out on 15 dyads ofbanking employees and customers The answers obtained from the respondents suggestedthat the measuring items were clear enough and appropriate for data collection

cus-The study targeted the frontline financial staff with tasks that accommodate demanding interactions with individual customers such as selling the bank’s products

time-Figure 1 The research model.

and services, providing personalfinancial consultancy, and handling with customer accountrelated inquiries and inquiries for loans In the commercial joint stock banks, these tasks arecarried out by customer service officers, personal financial consultants, and/or customerrelationship officers These services were selected because they offer ample opportunitiesfor customers to have long interactions with employees, which enable customers to evaluateemployee behaviours and relationships with employees better Moreover, employees whodeliver these services are encouraged to be attentive to customer needs and developingrelationships with customers, so they likely have prior experience in performing custo-mer-oriented selling behaviour and relational selling behaviour towards customers.The questionnaires were distributed in person to dyads of thefinancial staff and the cus-tomers during un-peak time The respondents completed the questionnaires after their trans-actions During answering processes, a research assistant who was knowledgeable about theresearch purposes, design, and details of measuring items, was available to offer help Eachpair of questionnaires collected from each dyad was then treated as a unit for data entry Ofthe 287 pairs of questionnaires collected, 17 questionnaires were dropped due to missing orincorrect answers 24 questionnaires with customers’ bank usage of less than six monthswere excluded because six months is too short for customers to evaluate employees’relationship selling behaviour and relationship quality with employees Eventually, 246valid questionnaires were used for data analysis Then, the data were analyzed usingdescriptive analysis, factor analysis, and structural equation SPSS and Amos were used

to conduct these analyses

3.2 Profile of respondents

The number of the dyads with valid responses was 246, including 246 individual employeespaired with 246 customers As for salesperson respondents, 71% were female A largenumber of employees (72%) were in the age group of 25–39 years 72% had a bachelor’sdegree as their highest level of education while 28% had a master degree 44% of the respon-dents had the tenure of 2–5 years in their current organisations Followed were the group withthe tenure of more thanfive years (28%) and the group of 1–2 year tenure (20%) Concerningcustomer respondents, 62% were female 66% were in the age of 25–39 Followed is thegroup of 40–60 years of age (22%) 44% had bachelor’s degrees while 35% had their quali-fication of under-bachelor 19% had a master degree 51% used the banks from 13 to 24months 34% used the banks for more than 24 months 24% have known their financialstaff for less than six months and 26% have known their staff from six months to 12months 30% have known thefinancial staff from 13 to 24 months Only 20% of the custo-mers have known theirfinancial staff for more than 24 months

3.3 Measures

Internal marketing was measured with eight items (α = 871) evaluating training, internalcommunication, empowerment, and management support These items were synthesisedfrom prior research (Altarifi,2014; Chang et al.,2012; Keller et al.,2006; Lings & Green-ley,2005) Service climate was measured with seven items of the global service climatescale (α = 938) adapted from Schneider et al (1998) Customer-oriented selling behaviourwas measured with six items (α = 871), adapted from Stock and Hoyer (2005) Scale ofrelational selling behaviour was taken from Lin (2012), consisting of eleven items (α

= 915) to measure interaction intensity and mutual disclosure of information Relationshipquality was measured with 8 items (α = 919) covering two dimensions including trust and

commitment These items were adapted from Hsieh and Hiang (2004) and Chen, Yen, kumar, and Tomochko (2011) Each item of service climate was rated on a five-pointLikert-type scale with response options ranging from 1 (poor) to 5 (excellent) Meanwhile,items of the other constructs were rated on a Likert scale offive items with 1 (strongly dis-agree) to 5 (strongly agree) (Appendix).

Raj-3.4 Assessment of common method variance

Common method bias was assessed using Harman’s single factor test for all items Theresults suggest that no general factor emerged to account for the majority of the variance

An unrotated factor analysis extractedfive distinct factors that accounted for 62% of thetotal variance The largest factor explained 27% of the variance Therefore, commonmethod variance did not affect this analysis In addition, variance inflation factors (VIF)were calculated to check for multi-collinearity VIF values ranged from 1.070 to 1.467,indicating that multi-collinearity issues did not affect this analysis

4 Results

The reliability of the constructs was tested by using Cronbach’s alpha value analysis TheCronbach’s alpha values of the constructs ranged from 871 to 938, indicating adequateinternal consistency of the measures The study conducted factor analysis to test discrimi-nant validity The extraction method was principal component analysis Five factorsemerged with Eigenvalues greater than 1, accounting for 62% of the variance Each itemloaded on its appropriate factor with no significant cross-loading All factor loadingshigher than 60 were retained for further data analysis One item of relational selling behav-iour was deleted due to its low loading The results show the acceptable discriminant val-idity for the constructs (Hair, Anderson, Tatham, & Black,1998) All of the variables havethe average variance extracted (AVE) values of above 50, except internal marketing (.46),and the composite reliability of all constructs are higher than 80 According to Fornell andLarcker (1981), if the AVE is less than 50, but its composite reliability value is higher than.60, the convergent validity of the construct is still adequate The composite reliability value

of internal marketing is 87, suggesting the construct’s convergent validity oriented selling behaviour has the highest mean (3.9) while relational selling behaviourreceives the lowest mean value (3.6) Most of the constructs have significant correlations.Though customer-oriented selling behaviour and relational selling behaviour have a rela-tively high correlation (.502), the result of Chi-square difference test suggests discriminantvalidity between the two variables asχ2

Customer-of the unconstrained model is significantly lowerthan that of the constrained model– model with the correlation parameter between the twoconstructs of 1.0, (χ2