Abstract: Due to the fact that most of services possess experience and credence attributes, thus the perceived risk in purchasing a service is higher than the purchasing of a kind of goods. As an extrinsic cue of “tangibilizing the intangible”, the role of service brand images in reducing customers’ searching costs and perceived purchase risks has become extremely salient. Taking 218 companies in the restaurant sector as the samples, this paper conducts an empirical study on such issues as whether the improvement of service brand image would enhance company performance and what kind of service strategies can improve brand image. The results indicate that service brand images have a positive effect on market performance which in turn positively affects financial performance; service positioning, brand managing, and service innovating have significant positive effect on brand image; customer participation, customer relationship management and service recovery management have no significant effect on brand image. Companies in the service sector should effectively manage service positioning, branding and innovating in order to improve their brand images.

Key words: brand image; service positioning; service innovation; branding management