Nation Brand Image and Product-Country Image

Nation branding concerns a country’s whole image, covering political, economic, historical and cultural dimensions. The concept is at the nation level, multi-dimensional and context-dependent. The nation image may have little impact on the consumer and has no link with the product offer. People may like or dislike a country for all kinds of reasons that may or may not affect their purchase decisions. On the contrary, product-country image, as a kind of secondary association, is part of the product brand and closely linked with a specific product or product category. It has an immediate effect on people’s minds and directly affects their purchase decisions. To the advocates of nation branding, Spain has provided a most successful example of rebranding a nation (Olins, 2003).

145 3.4 SERVICES

Services show special characteristics that require the application of a particular marketing strategy (Stanton, 1974; Andressen et al., 1983; Kotler et al., 1995). By their nature, services cannot be touched, tasted, or possessed (Edget & Parkinson, 1993). In general, services are intangible, heterogeneous, perishable, and require simultaneous production and consumption (Zeithaml et al., 1985; Ahmed et al., 2002).

(Edgett & Parkinson, 1993) acknowledge that it is now accepted practice to market services in a different manner to physical products to deserve separate treatment. As services cannot be touched, tasted or possessed, consumers face difficulty in evaluating an incorporeal service offering (Nicholls et al., 1995). (Nicholls et al., 1995) said that the incongruity in services makes it difficult to standardize and therefore control quality. Assael (1981) suggested that as consumers get more involved in purchases and are increasingly aware of major differences between brands, undergo complex buying behavior. Targeted marketing MBA programmes involve the selling of an expensive product, with significant brand differences and infrequent buying (Murray 1991). It is concluded when consumers face greater risk and uncertainty, they also extend their decision processes.

“Service industries and companies include those industries and companies typically classified within the service sector whose core product is a service” (Ziethaml, Bitner & Gremler, 2006, p. 5).

In other words, these companies sell services as their core offering. The total services sector comprises a wide range of service industries, one of which is educational services (Ziethaml et al., 2006). Ziethaml added services can be divided into four distinct categories namely: service industries and companies, services as products, customer service and derived service.

146 The service sector plays an important role in the Malaysian economy due to its rapid growth. In 2007, the services sector represented 67% of the economy of Malaysia (Bank Negara Annual Report 2008). A service is not like a product and involves human skills which can sometimes be retained to be used in the future. The unique characteristics of services contribute to the complexities involved in assessing and managing service quality (Mersha & Adlakha, 1992). Berry, Zeithaml and Parasuraman (1988), suggested that the intangibility of services and the simultaneity of service production and consumption make it difficult to standardize; thus making it difficult to control quality. Again, researchers like Assael (1981) said that consumers go through complex buying behavior when they are highly involved in a purchase and they are aware of significant differences between brands. Higher education such as the MBA is such service that involves time and money, significant brand differences and infrequent buying (Nicholls et al., 1995). This implies a careful decision which could involve considerable time to be made. As augmented by Murray (1991), in the face of greater risk and uncertainty, services customers engage in extended decision processes.

The service sector plays an important role in the Malaysian economy which is similar to other places in the world. Even though the service sector in Malaysia is relatively small if compared to developed countries, the liberalization of services initiated by the Prime Minister of Malaysia, Dato’ Seri Najib Tun Abdul Razak on June 2009 will propel the sector forward. This action was taken so that local service providers would have an even playing field to compete with regional service providers located in countries which sectors had been liberalized.

In this study, the service sector is the area of concern because of its huge potential and capability and also its products which are vulnerable to domestic and global economic conditions. In the context of this study, the provider of the services

147 includes Malaysian universities, the Ministry of Higher Learning and the Malaysian government as well as Malaysia as the host country. Meanwhile, foreign students who plan to study in Malaysia and current students represent the customers.

Mersha and Adlakha, (1992), added that most services involve direct contact between the customer and the service provider, meaning that, in addition to task proficiency, interpersonal skills like courtesy, friendliness, tolerance and pleasantness are important dimensions of quality. This is particularly so in high contact services where front-line employees are the key to customer satisfaction (Hobson, Hobson &

Hobson, 1984; Hostage, 1975; Wehrenbeer, 1987).

The nature of services makes it difficult to develop valid and reliable measures of service quality (Hollis & Dann, 2009). They observed that service quality is a difficult concept to define as it is a measure of how well the perceived level of service delivered matches service based on user expectations.

The complexity is further compounded because globalization, privatization and the service revolution are interrelated, and may involve, either directly or indirectly, a change in ownership of national assets characterized by a strong national brand image (Pecotish, Pressley & Roth, 1996). This may be particularly true in the service sector, for example with airlines such a Aeroflot, Singapore and Malaysian Airlines, where concern about foreign ownership makes good newspaper copy (Papadopoulos &

Heslop, 1993).

Research has led to the conclusion that the country of origin has an impact on product choice (Schooler, 1965, 1971; Nagashima, 1970, 1977; Hooley et al., 1988).

However, this research has been primarily concerned with tangible products with little research on the service sector. Studies related to higher education is even more lacking.

148 This is rather surprising, given that services have become a significant component of many modern economies. For instance, Cronin and Taylor (1992, p. 55) stated that 74%

of the US population is employed in the services sector, and that 85% of jobs created since 1982 have been in the services sector. In the USA alone, the service sector represented 79 percent of private sector employment and at least 77 percent of the gross domestic product in 1997 (O’Hare, 1999).

Little attention has been focused upon the variables, such as COO, which may influence the quality-satisfaction process by eliciting differences in expected service quality. Researchers in both the COO and services areas have neglected the investigation of the COO cue as a salient indicator of expected quality for the services sector. This is despite the evidence from research on tangible products, which shows that perceptions of product quality are influenced by many independent factors, most notably brand and COO (Johansson & Nebenzahl, 1986; Han & Terpstra, 1988; Ahmed et al., 1993).

Judgements about services are often subjective rather than objective and providing a consistent service is difficult as factors such as the interpersonal skills of contact staff can be crucial (Kotler, 1982). Service quality is made up of three significant dimensions; service processes, interpersonal factors, and physical evidence (Oldfield & Baron, 2000).