“Effect Of Internal Marketing On Service Quality: The Case Of Commercial Bank Of Ethiopia Ambo District‟‟

Abstract

The importance of internal marketing practices is widely recognised as being a critical determinant in improving service quality in service organisations. The idea of satisfied employees for the benefit of satisfied customers is developed through the concept of internal marketing, but still problems where traditional approaches of managing business that mainly focus on external customers. This research paper was conducted to examine the effect of internal marketing on customers’ service quality in commercial banks of Ethiopia Ambo district. This study used descriptive and causal research design and both primary and secondary data. The sample consists of 115 respondents from bank employees. The selection is based on convenience sampling procedure. Quantitative means of data collection method is employed to collect the data through questionnaire. The most commonly used dimensions of internal marketing were identified and used to show its effect on service quality. The collected data was analysed with the help of SPSS version 2026.Correlation and multiple regressions were used to investigate the relationship between dependent and independent variables. The Pearson correlation coefficient of internal marketing variables shows that there are positive and significant relationships between Internal marketing variables and customers perceived service quality of commercial bank of Ethiopia Ambo district in the seven selected branches. Even if there is a strong positive correlation between internal marketing variables and service quality, the regression analysis shows that employee empowerment, training and motivation are significant to explain the variation in service quality and internal communication has insignificant relation with service quality. Furthermore, 70.7% of the variation in service quality is explained by internal marketing dimensions in commercial bank of Ethiopia Ambo district. This study provides useful for managers and decision makers must clarify the strategic plan to the employees, with intensive focus on distribution of information and involvement in its preparation in order to feel that they are an important part of the bank, and to improve their sense of responsibility and enhance their ability to make better decisions.