Challenges and opportunities in fast pace service industry in Asia

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New Branding Challenges and
Opportunities Facing by Asian Service
Industry
1 Introduction
In this document, the potential of service industry in Asia will be presented first. Then,
understand the role of branding in services. Thirdly, challenges and opportunities relating to
service industry will be presented.
2 Service Industry in Asia
In the study conducted by Donghyun Park and Kwanho Shin (2012) shows that service
industry has evolved in 12 major Asian economies in their share of services in total output
and employment. Hence, the study suggests that services sector has potential and pivotal in
driving the growth in Asia.
3 Role of Branding with Services
Branding in services marketing is about the blending of functional and emotional values
(deChernatony and Dall’Olmo Riley, 1999). Free (1996) proposed that services branding was
about values which ‘represent the heart and soul of a company’.
4 Challenges and Opportunities in Service Branding
Below are various challenges and opportunities that should be in considerations in making
service branding successful and sustainable.
4.1 Technology Competition
L. Heracleous and J. Wirtz (2009) state that information technology (IT) in Singapore Airlines
is one of the most advanced and user-friendly in the industry where customers can check
schedules, check into a flight, manage their frequent flyer account and etc. Effective use of

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IT enhance service levels and improve efficiency, otherwise company cannot stay ahead of
their competitors due to outdated IT.
4.2 Difficulty in Differentiating
4.2.1 Differentiate through Emotional Values
Emotional values in particular are becoming increasingly important in differentiating brands.
deChernatony Harris and Dall’Olmo Riley, (1999) indicate that a brand’s emotional added
values are more sustainable than functional added values which may be easily copied. An
example of using emotional marketing in branding is Starbucks, when Howard Schultz saw
the coffee culture in Milan where people met in the morning and caught up with news. He
then created a great differentiator, a community called “third place” to attach great
experience with Starbucks customers. Since then Starbucks has created enormous loyalty
and products are sold at a very high premium (Debbie Millman, 2011).
4.2.2 Differentiate through Innovation
In February 2012, Great Eastern declares that they are ‘no longer just a life insurance
company, it is a LIFE company.’ It changing the way it looks at life insurance and will actively
help and reward customers to live better, healthier and longer through an industry-first
integrated Live Great programme, aimed at turning their intentions into actions (Great
Eastern Life).
4.3 Inconsistencies in Service Delivery
Lack of consistency in service delivery by in brand delivery is common. It is important to
integrate service branding through organisational level. To develop a broader theoretical
framework for the service brand, Brodie et al. (2006) built on the notion of conceptualizing
the brand as a set of promises (Balmer and Gray, 2003).

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The framework is outlined in Figure 1, allows integrated perspective in the perception of
service brand from customers, employees and organizational view point.
4.4 Lack of Service Quality
Services are fluid, dynamic, and frequently co-produced in real time by customers,
employees, and technology. Berry (2000) described traditional understanding of service
branding tends to neglect one of the key characteristics of services, where services are
processes. This neglect causes the overlook of brand relationships and delivery to customers.
4.5 Fragmenting Media and Eroding Effectiveness
Fragmentation results from the interaction of media and audiences. Steady growth in the
media outlets and offer competitions is the most obvious cause of fragmentation. This
happens when expansion in established media (i.e. television), or when newer media (i.e.
internet, social media) enter the competition (Napoli, 2003). Marketers will not make a
difference if they always imitate what is popular. However, opportunities for a successful
media will be wider in the modern world if advertiser can make a differentiation. Good
media message will be the topic that people talk about, sharing with friends and share via
social networks (James G. Webster, 2011).
Figure 1 - From goods to service branding: An integrative perspective.

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4.5.1 Emerging New Communication Options
Viral marketing was a tactic used for trendy brands, it is increasingly acknowledged to be an
effective communication option in the modern world especially with younger generation as
target customers. Through viral marketing, Asian companies can utilise individual’s
communication networks, and relying on their personal recommendations to sell the
service. Online dating company are great example of using viral marketing to increase traffic
and customer-base.
4.6 Asian Culture
4.6.1 Top-Down Management
With the higher power distance in Asian cultures, the study find a greater reliance on
management by fiat in the region. This is especially the case in family owned firms, where
family owners dictate and hire managers who execute with less open dissent. It is common
to observe top-town or dictatorial management style that discourages relevant information
and ideas from lower management.
4.6.2 Short-term Profit
According to Paul Temporal (2005) ‘Many Asian CEOs tend to back away from brand
investment. It is not how much money a company spends but how well it spends it’.
Management is having high pressure to deliver short-term profit, results are often assessed
on the sales return diluting the importance of brand building as a long-term effort.
4.7 Demographic Factor
The study from Karthikeyan R, Anitha R (1991) suggests that demographic changes in the
country are one reason for the growth in the services sector. When younger generation gets
more, employment opportunities and the population rate increase, their high purchasing
will automatically create a demand for the services. The service marketers get an
opportunity to market their services to the young customers. With the decrease in the
mortality rate the older population increases and the demand for the services like hospital,
insurance and banking goes up.

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4.8 Political Influence
Another challenge in Asian service branding is to encapsulate the nation spirit to manage
international perception of their nations. One of the examples stated by Keith D. (2012) was
Japan, with the rapid turnover of prime ministers; the effort of building Japan’s nation
branding established by the previous Prime Minister Junichiro Koizumi was shifted by the
new minister.
5 Conclusion
The service branding is dependant highly on strategic marketing activities with clear vision
or goal. Organisation should work towards the same vision with customer at top of mind.
Communication of work progress, continuous improvement ideas and measures, standard
operating procedures should always be documented and communicated to the whole
organisation. Organisation should always include branding as part of the boardroom
discussion to achieve a sustainable and profitable brand building effort. With the support
from top management, it drives service innovation and technology advancement which is
the crucial element to keep a brand sustainable and ahead of its’ competitors.

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