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The purpose of this study is to explore how the adoption of an internal marketing (IM) programme in a retail banking setting enhances some positive employee behaviours that promote customer perceived service quality.

A multilevel research design is adopted which draws evidence from branch managers, employees and customers in order to investigate whether branch manager’s adoption of an IM philosophy affects front-line employee responsiveness to the firm’s IM strategies and their levels of motivation, empowerment and organizational identification (OI), respectively.

Results indicate that manager’s IM adoption can enhance employee adoption of IM and raises their levels of motivation, empowerment and OI. The moderating role of manager-employee dissimilarity is also discussed. Finally, findings confirm that employee motivation, empowerment and OI affect customer perceptions of service quality.

This study provides an important shift by formally including IM into multilevel marketing research and establishes another link in the IM-organizational performance relationship, uncovering some behavioural routes through which the positive effects of IM can add to the achievement of firm’s external marketing objectives.