With the development of internet and other kinds of media, it has become important for corporations to realize the changed role of customers who actively collect information and influence other customers. And with the change in environment linking cus...
With the development of internet and other kinds of media, it has become important for corporations to realize the changed role of customers who actively collect information and influence other customers. And with the change in environment linking customers with purchasing environment, the concept of internal marketing has also become important. Internal marketing refers to the act of treating employees as another customers and expecting to understand customers’potential and influence.
Meanwhile, as the corporate image becomes more significant for practical corporate outcome, companies have doubled their effort to promote their corporate image. In addition, corporations are placed in a price-competitive environment not only with high oil price and increase of raw material price but also with the third world like China and Vietnam that has the advantage of cheap labor.
Thus, it is inevitable for most companies to purchase their needs of materials or parts through outsourcing. So the conflict which comes from unreasonable and unfair situations between the "purchasing firm" and the "supplying firm" is nothing new.
Corporations have to put all effort on customers as their income source, managing their suppliers strictly to make profits based on more competitive costs. But there is a dilemma that the employees of those suppliers are also another customers.
They are customers who are active and can influence others. And with the increase in purchases, their numbers cannot be taken lightly. Since they interact with corporations and experience them, they become a reliable information source.
Along with the changes caused by the increase in external purchase and procurement, as has been said by many researches, products and service are primary factors for building a corporate image. Now, the suppliers, or their members have become important internal customers as well as contributors to form a corporate image both in terms of management and communication. However, they have been alienated from the category of customer.
Thus, this study has researched on the difference in factors contributing to LG's corporate image between general consumers and members of suppliers, which factors have more influence, and what relationships corporate images have regarding their purchase intention. The "suppliers" or partner firms in this article means the group contributing to LG's corporate image by contacting them; "general consumers" means the group that contributes to the corporate image through product experiences, advertisements or public relations, having nothing to do with business.
A total of 222 surveys were used for the statistical analysis; 104 were distributed to general consumers; 86 were distributed to partner firms related with LG's digital display department; 32 were inappropriate for the study. The survey was taken for two weeks from May 4th, 2008 to May 18th, 2008.
Multiple regression analysis was used for this study while corporate image factors were divided into 7 groups: product service image, customer service image, prospect image, corporate culture image, management image, reliability image, and social contribution image. Each factor was treated as independent variables while preference and purchase intention were treated as dependent variables.
Firstly, the factors and standard of LG's corporate image showed some difference between the partner firms and general consumers. The general consumers gave on average, higher marks on LG's corporate image compared to partner firm employees, implying LG's corporate image has formed more positively towards the consumers. In particular, regarding LG’s practical corporate culture and management policy, a huge difference was recognized from general consumers, meaning that LG should plan new marketing strategies including members of suppliers as their internal customers. It can be said as a huge waste of energy in marketing and promotion if they were to perceive partner firms as an organization between A and B. Also, since they contribute to LG’s corporate image through specific interaction, changes in perception and behavior towards partner firms must be made.
Secondly, the fact that customer service image, which includes promotion and advertisements, was regarded as the most important to partner firms, meaning that they look at promotional activities as if they were a part of the LG group, not just simply in a customer’s view, and take any brand image improvements positively. Although they may experience any unfair treatment during the business, the partner firm employees are already hoping for the understanding as an image forming subject and development which is same as those of LG. As the researcher, this caught interest because they shared the same pride as LG for their results, which is an important factor in purchasing their service or products. In other words, LG needs to keep in mind that they have, by their side, a potential customer that can influence other customers as well. On the other hand, the fact that general consumers did not think customer service image influences their preference means that offering value and service to customers is a very natural corporate activity, and that customers judge on both product and non-product related images before making choices, rather than depending on advertisements. Since this article focuses on the potential of partner firms as new customers, and that social contribution image is important while customer service image has less influence, LG must make many praiseworthy stories on its internal customers but for practical reasons.
Partner firms and its parent group, in other words, LG and their partner firms form a community that make up LG’s image together. Only when LG’s vision and policy are delivered well, real cooperation can be possible. And when profit can be made in the process, it can receive respect from the customers. Even through LG has proclaimed its standard management, value creation for the customers, human respecting management and first LG, this article has proved that their interest and investment in partner firms are insufficient. Parent groups, including LG, and in particular, major companies can succeed when they don't take image factor differences between groups as a complaint of ‘B’ to ‘A’, but regard them as a "customer." More consumer values can be created through the royalty of internal customers when they move as a fate-sharing community who must experience success or failure together.