Internal Marketing as a Strategic Lever for Customer Satisfaction: The Mediating Role of Employee Engagement and the Moderating Role of Organizational Culture

Abstract

This study investigates how internal marketing practices influence customer satisfaction, focusing on the mediating role of employee engagement and the moderating role of organizational culture in service-sector organizations in Pakistan. In an increasingly competitive and service-driven environment, many firms struggle to convert internal initiatives such as communication, training, empowerment, and rewards into consistently higher customer satisfaction. Drawing on internal marketing theory, employee engagement literature, and the organizational culture perspective, this study proposes and tests a model in which internal marketing directly enhances customer satisfaction and indirectly affects it through employee engagement, while organizational culture strengthens these relationships. A quantitative, cross-sectional survey design was employed, using standardized scales to measure internal marketing practices, employee engagement, organizational culture, and customer satisfaction among employees in Pakistani service organizations. Data were analyzed using Partial Least Squares Structural Equation Modeling (PLS-SEM). The results show that internal marketing practices have a positive and significant direct effect on customer satisfaction. Employee engagement is found to significantly mediate the relationship between internal marketing and customer satisfaction, indicating that internal initiatives are most effective when they translate into higher vigor, dedication, and absorption among employees. Furthermore, organizational culture positively moderates the relationship between internal marketing and customer satisfaction, suggesting that supportive, service-oriented cultures amplify the impact of internal marketing efforts. The model demonstrates substantial explanatory and predictive power, highlighting internal marketing, engagement, and culture as strategic levers for improving customer outcomes. The study contributes theoretically by integrating psychological and contextual variables into internal marketing frameworks and offers practical guidance for managers aiming to enhance customer satisfaction through stronger internal practices and culture-building efforts.