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The international brand valuation manual: A complete overview and analysis of brand valuation techniques, methodologies and applications
Abimbola, Temi. Journal of Brand Management, suppl. Special Issue: Brand Governance17.8 (Jul/Aug 2010): 618-621.

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Gabriela Salinas John Wiley and Sons Ltd, Chichester, UK, 2009, Cloth, 420pp., $74/50, ISBN: 978-0-470-74-031-6 The International Brand Valuation Manualis a book that is long overdue. Gabriela Salina's work examines one of the genuinely interdisciplinary subjects in accounting, finance, marketing and management in general: brand valuation. Numerous approaches have emerged since the mid-1980s in which brand, then buried under the rubric of 'goodwill', could account for more than 70 per cent of the price paid to acquire a business. Evidence from numerous mergers and acquisitions since then, including more recently Kraft-Cadbury for example, have shown that brands both create and act as stores of value and justify high market-to-book multiples. Following on from this, the book includes numerous well-designed studies from academia and practitioners, which have led to the development of various different procedures for brand valuation, and Salina's work aptly captures, evaluates, critiques and offers an intelligent analysis of them. An extremely well-considered choice of title captures the essence of Salina's work, reflecting the breadth and depth of her professional experience and understanding of accounting, financial and marketing issues. The book is well researched and rigorously examines the genealogy, conceptual underpinning of various approaches to brand valuation, and the methodologies behind them. The resulting catalogue is well supported with cited sources, coherently examining major trends in the theory and practice of brand valuation relevant to accounting, economics and finance, as well as brand marketing in which the concept of brand valuation originated. Essentially, the book offers an extensive review and analysis of the main brand valuation models in both practice and as published in the professional and scholarly literatures. Advantages, disadvantages and efficacy of each method and possible future use for them are all clearly laid out and discussed. A number of pedagogy features,

which include examples and vignettes, offer the possibility of its use as a supporting textbook on brand marketing, economics and behavioural finance courses at final-year undergraduate and post graduate level. Chapter one examines the concept and relevance of brand and its growing importance. Here, Salina depends very much on marketing concepts to present and explain brand to the reader. The chapter presents the argument that, for any brand valuation methodology to be effective, it is imperative to jettison the marketing approach and define brand in terms of its economic value and clarify its relationships with other concepts such as corporate reputation, intellectual capital and intangible assets. To Salina, the absence of a single definition for brand from marketing - the field arguably able to say one or two things about brand building is muddying the brand valuation water with 'adverse conflation of terms such as brand equity '. One could interpret her argument as evidence of an accounting/finance antipathy towards marketing, especially in the light of further assertions that a marketing-oriented approach should be discarded in favour of 'both the accounting and economic definition of brand as intangible asset(recognizable or not)'. Such an interpretation, in my view, would be erroneous for two reasons. First, Salina's assertion reflects the fundamental role of brand as a key platform linking brand-owning organisations and their market (including customers, and other stakeholders), which, of course, confers the economic importance on the brand. Second, information carried by the brand is increasingly becoming a larger part of an overall product offering; hence, brand is the platform for framing a whole value proposition and presenting it to the market. As specific features associated with a given product, service or indeed any offering become commoditised and less important, the franchise embodied in the brand itself becomes both the symbol and the carrier of mutual value between a firm and its stakeholders. This economic value of brand is evidenced by the growing gap between corporate market and book values and is reflected in several indices, for example in the S&P 500 where market-to-book ratio went from 1.3 in the 1980s to 4.6 by June 2004. It is true that brand is only one of several intangibles that investors regard as productive resources, which also include patents, distribution rights and customer databases; but although accounting regulations and conventions may or may not always allow its inclusion on the balance sheet, it is certainly one of the most important. Therefore, although organisations must use market(ing) techniques to create, nurture and sustain their brands, the success of such efforts can only be known through brand performance in the 'real economy' - the market. As a result, one could argue that a marketer, who succeeds in building a strong brand that acts as a key anchor and appropriator of market value around which an organisation's competency and capability can be focused and evaluated, plays a critical role and that brand and brand valuation thus deserve board-level consideration. The book treads a difficult path between the sometimes conflicting disciplines, finance and marketing, with a keen eye of an accountant and the lucidity of expression of a marketer. The result is a compendium of brand valuation methods and, as the book proceeds, one increasingly gets the sense that the actual challenges of designing brand valuation approaches unsurprisingly reflect those of measuring intangibles more generally. Salina also

analyses the respective efficacy, advantages, disadvantages and prospects for the future for each method discussed. Chapter two reviews the origin and evolution of brand valuation by tracing interest in the subject back to the 1980s when a number of companies with strong brands used them to boost the value of their balance sheets by accounting for them as goodwill. Other corporate acquisitions since then have continued to show that brands create value and justify the high prices paid for companies with strong brands that generate higher market-to-book values. The chapter looks further at who values brands today and which corporations use the tools of brand valuation created since then. It also examines how investment analysts and others in the market use the information. Chapter three considers brand valuation method and contains discussion of the process, the purpose of brand valuation and the nature of internal and external transaction purposes. Chapter four concerns various general views on brand valuation with cost, market, income and price premium approaches reviewed. Chapter five presents specific valuation procedures offered by service providers from all over the world, as well as models developed by academic researchers well known in the field, and as such is a tour de force on brand valuation methods. Chapter six looks at the points of agreement and divergence between various methodologies presented in Chapter five. Chapter seven analyses the current status of brand valuation by evaluating how different approaches currently in use are put into practice. This involves a review not only of the current methodological and industry trends, common errors and problems associated with brand valuation, but also of what seems to be a growing rapprochement between marketing and corporate finance. Although this is a positive step forward, lack of methodological consensus in theory and practice as well as the academic versus professional practice divide are two key challenges facing those researching and those using brand valuation services. Chapter eight poses the question of whether corporate brand valuation is possible and is relatively similar in structure to those on product brand valuation approaches. An interesting and important point here is the paucity of literature on this important topic. It is worth noting that, in any emerging area, one would expect a raft of new concepts and ideas to capture different corporate-specific variables, competing views on the validity of those variables, and arguments on how such areas should be studied as well as epistemological and methodological variations. As in the case of product brand, corporate brand valuation is likely to yield a number of competing approaches and methods as scholars and practitioners develop new offerings. Chapter nine offers the author's views on future trends in supply and demand of brand valuation services, and the reservations held by some financial officers with the whole notion of brand valuation. This tension relates to the novelty of the subject as well as a lack of methodological consensus. Perhaps most important is Salina's suggestion that marketing specialists would need to use valuation prudently and find a new language that is compatible with finance. By carefully laying out different techniques, methodologies and appropriate applications, Salina's work shows that the subject of brand valuation is central to the intangible economy

and expressive nature of the organisation and the rewards that accrue to them. Brand Valuationhas set the agenda for debate, and it is a required reading for anyone interested in the scholarly exposition, practical application and the future of valuing brands and intangible assets in general. In summary then, there is a lot to recommend in this book for all practitioners and students of brand marketing. For the more experienced, it can serve to refresh and re-familiarize with thinking in the field; for those relatively new to the area, it can serve as an excellent grounding in the methodologies developed by various consultants and their application. By presenting these different approaches, the thinking behind them and their strengths and weaknesses, it can help to navigate what may sometimes seem like an unbridgeable gulf between the perspectives of marketing and finance practitioners when it comes to considering brand valuation. Gabriela Salina has thrown down the gauntlet for those in marketing and corporate finance to work together in creating a consensus in this area, arguably one of the most important contributions to thinking in brand management in the last 50 years. AuthorAffiliation [a] Warwick Business School, The University of Warwick, UK

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Title The international brand valuation manual: A complete overview and analysis of brand valuation techniques, methodologies and applications Abimbola, Temi Journal of Brand Management 17 8 Special Issue: Brand Governance 618-621 4 2010 Jul/Aug 2010 2010 Palgrave Macmillan London

Authors Publication title Volume Issue Supplement Pages Number of pages Publication year Publication Date Year Publisher Place of Publication

Country of publication Journal Subjects ISSN Source type Language of Publication Document type DOI ProQuest Document ID Document URL Copyright

United Kingdom Business And Economics--Marketing And Purchasing 1350231X Scholarly Journals English PERIODICAL 10.1057/bm.2010.16 746391990 http://search.proquest.com/docview/746391990?accountid=31551 Palgrave Macmillan, a division of Macmillan Publishers Ltd 2010 2010-08-23 ABI/INFORM Complete << Link to document in ProQuest

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