Abstract

This research seeks to develop a deeper understanding of how internal marketing (IM), conceived as an operant resource from the service-dominant logic (SDL) perspective, contributes to improve service firms competitiveness. To do so, the study examines the effect of applying IM on firms' market orientation (MO) and on their predisposition to involve customers and front-line employees in service innovation, as well as how these practices ultimately improve their long term performance relative to competition. The conceptual model is evaluated using structural equations modelling and the information provided by a Spanish sample of 240 hotels. Results support the importance of the co-creation culture for hotels' competitiveness and the key role of IM to foster MO and develop a favourable culture to co-creation.

Key words: Internal marketing, co-creation culture, market orientation, front-line employees, performance.