Because of the dominance of the service sector in modern economies, services marketing today is of particular interest to marketers. Internal marketing shows up in the literature on service marketing in '70s and his concept eventually evolved and grew more familiar. The concept of internal marketing occurs as a possible solution for more frequent changes in companies, as well as the need to satisfy employees, whose performance, as proven by the many studies, is often crucial for customer satisfaction. Through it, companies can achieve integration of all functions in the company, managing employees satisfaction, operating with unique effort and a common goal of satisfying customers, while sharing same vision and mission. Although still not sufficiently accepted or applied, this concept certainly has become well-known in the services marketing as inevitable for service companies. Despite its development, many studies point to the relatively low rate of application of internal marketing in practice. It is clear that entrepreneurs are still not sufficiently aware of the benefits and opportunities internal marketing offers, probably because these benefits are difficult to measure. The situation is similar in Croatia, which is shown in previously conducted studies whose results indicate the absence of a formal plan of internal marketing in companies and the mediocre to somewhat good implementation. Study conducted for the purpose of this final thesis, which explores the application of internal marketing in the service sector, exclusively from the perspective of employees, indicates mediocre application of internal marketing and insufficient internal marketing orientation of management which leads to mediocre employees satisfaction. Satisfied employees are the key for delivering excellent customer oriented service, and customers recognize and look for quality. Embracing the philosophy of internal marketing could give companies a competitive advantage and raise the service delivery standard to a higher level. Therefore, it is necessary to encourage the use of the concept and more researches, through literature and study programs, so that prospective or current entrepreneurs would be provided with a better understanding of its instruments and benefits .