Multimedia associa pdf_tm-zara

CATHOLIC UNIVERSITY OF PORTUGAL
Master Thesis
ZARA: A Case Study about Brand Valuation
Rita Leão Furtado Gomes
Porto 2011

CATHOLIC UNIVERSITY OF PORTUGAL
School of Economics and Management
MSc. in Finance
Master Thesis
ZARA: A Case Study about Brand Valuation
Rita Leão Furtado Gomes
Master Thesis Advisor:
Prof. Luís Pedro Krug Pacheco
Porto, September 2011

EXECUTIVE SUMMARY
The 100 most valuable brands in the world increased their value last year
by 3,7% to a total of USD 1,203 thousand million (based on Interbrand 2009 and
2010 database). This seems to be somewhat controversial given the financial
crisis that we are experiencing. However, one may think that is especially during
these times that there are the major opportunities for mergers and acquisitions.
Following this, when we consider a transaction, the first issue that we think
about is how determine its right pricing. Some assets, such as properties and raw
materials, can be easily identifiable and converted into a monetary value. In turn,
the brands, as others intangible assets, despite may be the most important assets
in many business, they cannot be explicitly valued.
Hereupon, and motivated by the chance of ZARA’s brand acquisition by
Hennes & Mauritz AB (H&M), we will try, along this dissertation, to find out a
reliable way to calculate the ZARA’s brand value.
Firstly, we are going to approach some essential concepts that are critical
for a better comprehension of all the case study. Therefore, we will focus more on
the topic of brand valuation. Our purpose is to describe the different motivations of
brand valuation as its different approaches.
The second major part of this work is the review of the Brand Rating, BBDO
Brand Equity Evaluator® and Interbrand models. Every method will be presented
in particular and afterwards critically assessed by means of the list of the compiled
requirements. After these three analyses, we gather the conditions to select the
one most appropriate to valuate ZARA’s brand. Due to the limitations present in all
models, the brand valuation will be a long road of options and reviews.
Nevertheless a monetary value will be reached and so, we will meet the
requirements that enable to start the negotiations between buyer and seller.
Keywords: brand valuation, brand valuation methods, Interbrand.

GREETINGS
I couldn’t forget to present my sincere compliments to all of those who have
helped me to make this case study better.
First of all, I have to thank Professor Luis Pedro Krug Pacheco for the
precious guidance and availability throughout the whole period. The numerous
clarifications along with the academic material were of extreme importance to
develop my work. Valuing Zara without his insights would have been not only
harder but also would have turned out with poorer results.
Also, Mr. Indalecio Perez Diaz del Río, from the Corporate Responsibility
Department of Inditex, has been a wonderful help, always available to answer to
any and all of my questions, as well as to provide me all the data he could. I am
sincerely thankful for.

4
TABLE OF CONTENTS
LIST OF FIGURES.....................................................................................................6
LIST OF TABLES ......................................................................................................7
LIST OF ABBREVIATIONS.......................................................................................8
INTRODUCTION........................................................................................................9
PARTE I – LITERATURE REVIEW AND ZARA’S PRESENTATION.....................11
1. THE CONCEPTS APPROACH .....................................................................11
1.1. Brand.......................................................................................................11
1.2. Brand Equity............................................................................................12
1.3. Brand Valuation.......................................................................................14
2. PROBLEM STATEMENT AND ZARA’S PRESENTATION ...........................15
2.1. Problem Statement & Research Question ..............................................15
2.2. Zara Presentation....................................................................................16
2.2.1. The Company ....................................................................................16
2.2.2. The Concept ......................................................................................17
2.2.3. Key International Competitors ...........................................................19
2.2.4. The Financial Performance................................................................21
2.3. A Brand’s Value in the Existing Accounting Standards...........................22
3. THE ORIGIN AND THE PURPOSES OF BRAND VALUATION....................24
3.1. Origins: The series of acquisitions in the 1980’s.....................................24
3.2. The Purposes of Brand Valuation ...........................................................25
3.2.1. Brand Management Purposes ...........................................................26
3.2.2. Accounting Purposes.........................................................................27
3.2.3. Transactional Purposes .....................................................................28
3.3. Method Requirements for the Cause of Acquisition................................29
4. CLASSIFICATION AND CHOICE OF THE METHODS OF BRAND
VALUATION .........................................................................................................31
4.1. The Different Approaches .......................................................................32
4.1.1. Financial.............................................................................................33
4.1.2. Consumer’s Perspective....................................................................36
4.1.3. Integrative Methods ...........................................................................37
4.2. The Selected Methods ............................................................................38

5
PARTE II – METHODS OF BRAND VALUATION ..................................................40
5. PRESENTATION AND CRITICAL ANALYSIS OF THE SELECTED METHODS .............40
5.1. Brand Rating ...........................................................................................40
5.1.1. Method Presentation..........................................................................40
5.1.2. Critical Analysis..................................................................................43
5.2. BBDO Brand Equity Evaluator®..............................................................45
5.3. Interbrand................................................................................................50
5.4. The Choice..............................................................................................55
6. ZARA BRAND VALUATION BY INTERBRAND METHOD ............................56
6.1. Calculation of Brand Value......................................................................56
6.1.1. Segmentation.....................................................................................56
6.1.2. Financial Analysis ..............................................................................57
6.1.3. Demand Analysis...............................................................................60
6.1.4. Brand Strength Analysis ....................................................................62
6.1.5. Net Present Value Calculation...........................................................64
6.2. Analysis of the Result..............................................................................66
7. PROBLEMS AND LIMITATIONS FACED THROUGHOUT ZARA’S BRAND
VALUATION .........................................................................................................68
REFERENCES.........................................................................................................71
APPENDICES..........................................................................................................77
APPENDIX 1: ZARA'S BRAND VALUATION BASED ON INTERBRAND MODEL .77
APPENDIX 2: ZARA’S BRAND VALUATION BASED ON INTERBRAND MODEL
BY CHANGING RBI TO 40%...................................................................................78
ANNEXES................................................................................................................79
ANNEX 1: H&M AND ITS OTHER BRANDS ...........................................................79
ANNEX 2: BEST GLOBAL BRANDS, 2010 RANKINGS .........................................80
ANNEX 3: CASH FLOW COMPUTATION...............................................................86

6
LIST OF FIGURES
Figure 1. ZARA's Sales Contribution by Sales Format...........................................17
Figure 2. ZARA’s Business System........................................................................18
Figure 3. A Product Market Positioning Map ..........................................................19
Figure 4. Characteristics of Brand Valuation Approaches ......................................33
Figure 5. Financial Approaches ..............................................................................34
Figure 6. Icon Iceberg.............................................................................................41
Figure 7. The Brand Rating “Formula”....................................................................43
Figure 8. Process to Calculate Brand Equity for the Purpose of Acquisition Applying
the BBDO Brand Equity Evaluator®.................................................................46
Figure 9. The BBDO Five-level Model® .................................................................47
Figure 10. Overview of the Interbrand Method .......................................................51
Figure 11. S-curve ..................................................................................................53
Figure 12. Example of ZARA’s Market Segmentation ............................................57
Figure 13. Branded Own Label Drivers/ Role of Brand...........................................61
Figure 14. Cash Flow Computation ........................................................................86

7
LIST OF TABLES
Table 1. Best Global Brands of Fashion Industry– 2010 Rankings ........................22
Table 2. Examples of Goodwill Payments in the Eighties. .....................................24
Table 3. Perspectives and Reasons for Brand Valuation .......................................26
Table 4. Required Criteria for Brand Valuation Methods in Case of Acquisition ....31
Table 5. Fulfilled Criteria by Brand Rating Brand Valuation Method ......................44
Table 6. Fulfilled Criteria by BBDO Brand Equity Evaluator® Brand Valuation
Method......................................................................................................50
Table 7. Fulfilled Criteria by Interbrand Brand Valuation Method...........................54
Table 8. ZARA’s Financial Analysis Applying the Interbrand Valuation Method ....58
Table 9. ZARA Demand Analysis Applying the Interbrand Valuation Method........62
Table 10. The ZARA’s Brand Strength Score and their Evaluation Criteria ...........63
Table 11. ZARA’s Brand Value Calculation by Applying the Interbrand Valuation
Method....................................................................................................65
Table 12. ZARA’s Brand Value in Euros and Dollars .............................................66
Table 13. ZARA’s Brand Value by Assuming Different Brand Discount Rates and
Long Term Growth
Rates………………………………………………................67
Table 14. ZARA’s Brand Valuation based on Interbrand Model.............................77
Table 15. ZARA’s Brand Valuation based on Interbrand Model by changing RBI to
40%.....................................…………………………………………………78
Table 16. Best Global Brands of Fashion Industry– 2010 Rankings ......................85

8
LIST OF ABBREVIATIONS
BBS Brand strength score
BEE Brand Equity Evaluator
BEES Brand Equity Evaluation System
BEVA Brand Equity Evaluation Accounting
CAPM Capital Asset Pricing Model
CF Cash flow
cf. compare
EBIT Earnings before interest and taxes
EVA Economic value added
GDP Gross domestic product
i.e. this is; in other words
IAS International Accounting Standard
IFRS International Financial Reporting Standards
ISO International Organization for Standardization
No. Number
NOPAT Net operating profit after tax
NPV Net present value
p. page
pp. pages
PWC PricewaterhouseCoopers
RBI Role of brand index
WACC Weight average cost of capital

Catholic University. ZARA: A Case Study about Brand Valuation.
9
INTRODUCTION
In the late 1980s, with the series of acquisitions of strong branded
companies by six and more times of their book value, - as a way of example,
the Rowntree purchase by Nestlé, who paid an estimated 83% of the price as
goodwill (Haigh 1999) – led to brand valuation has become one of the most
important focus of managing activity.
Beyond that, the strong development of new technologies has allowed
that the markets reaction to new information has become easier and quicker,
which has stimulated financial transactions, like mergers and acquisitions. In
fact, nowadays, intangible assets, with principal emphasis for brands, are
increasingly being recognized as highly valued properties (Roberts 2011)
and their transactions (for the most different reasons) have increased
substantially.
This case study, about brand valuation, will be critically developed
with the aim of determine the ZARA’s brand value for the final purpose of
acquisition. Hennes & Mauritz AB (H&M), a fast fashion company is
analyzing the hypothesis of acquire ZARA’s brand, its closest competitor.
However, H&M wonders about what should be the right value of its offer.
To provide the basis for the work, we will firstly delineate what is
included in the definition of brand, brand equity and brand valuation by
pointing out different visions of various authors. Following that, we will
introduce the ZARA’s business to allow a better understanding of the brand’s
position in the market and its background. A topic that we could not also
forget to mention, for its controversies, is the accounting treatment of the
intangible assets in the balance sheet. To provide a general survey of the
brand valuation subject, we will go back to its origin and consequently
address the different causes for brand valuation. Here, we will determine the
acquisition the appropriate cause of ZARA’s valuation and therefore we will
construct a list with special requirements that the brand valuation models
must fulfill. To conclude the first part of the study, called literature review and

10
ZARA’s presentation, we will classify by different approaches the numerous
methods of brand valuation.
Nowadays the list of valuation models is too large (Salinas, 2009) for
we address all of them in this work. Thereby, in the second part of this
dissertation, we will sort out those that gather more consensus about
consistency and are applied more frequently. Additionally, they should meet
largely the requirements established along the work and must be suitable for
the purpose of the valuation.
Nevertheless, brand valuation is far from being a consensual subject
or an exact science. The discussion about the best method to calculate the
brand value is still an open issue, since systematic analysis have proven that
each of the existing methods has its owns limitations. In fact, over our
process of ZARA’s brand valuation, we had to take some assumptions, in
which the difficult task as to make them as plausible and coherent as
possible. Moreover, consider that a brand’s value depends on its capacity to
create value now and in the future, there is always going to be uncertainty
along the process.

11
PARTE I – LITERATURE REVIEW AND ZARA’S
PRESENTATION
1. THE CONCEPTS APPROACH
We can’t start speaking about brand, without first define it. This is
particularly important when there are many different perspectives and
definitions for brand’s concept. In the following chapter, we will present and
discuss the various definitions and perspectives of brand, brand equity and
brand valuation that are critical for comprehension the present study.
1.1. Brand
To date, there is no standardized definition of brand. Over the past
years, the brand has taken different functions over economic agents and is
used a large number of times by different research areas, which has led to
exist different interpretations of it and, consequently, brand assumed different
meanings.
In literature, for Leuthesser, a brand is a product additional value (for
its customers1
) compared with what would be the value of another identical
product without the brand (as cited in Wood, 2000). With the same point of
view is the definition of Kotler (2000), a marketing reference, that defined
brand as a name, term, sign, symbol, or design, or combination of them
which is intended to identify the goods or services of one seller or group of
sellers and to differentiate them from those of competitors. Differently, is the
Keller’s (1998) vision that concerns itself more with the conception of the
brand, whenever a marketer creates a new name, logo or a symbol for a new
product, he or she has created a brand.
In an formal perspective, the dictionary of business and management
defined a brand as a name, sign or symbol used to identify items or services
1
We use the terms “customer” and “consumer” interchangeably.

12
of the seller(s) and differentiate them from the goods of competitors (as cited
in Keller, 1998). Similarly to this consideration is The American Marketing
Association definition, which defined a brand as a name, term, sign, symbol,
or design, or a combination of them, intended to identify the goods and
services of one seller or a group of sellers and differentiate them from those
of competitors (as cited in Wood, 2000). On the same line of perception is
the concept of the Marketing Science Institute that defined brand as the
strong, sustainable and differentiated advantage with respect to competitors
that leads to a higher volume or a higher margin for the company compared
with the situation it would have without the brand. The differential volume or
margin is the consequence of the behavior of the customers, distribution
channels and the companies themselves.
To sum up, there are different definitions for brand however; all of
them converge on the issue of brand providing identity and/or difference
between competitive offerings.
1.2. Brand Equity
An important concept that we will adopt in this study is the brand
equity. At the simplest level, brand equity can be described as the value of a
brand however, if you ask 10 people to define brand equity, you are likely to
get 10 (maybe 11) different answers as to what it means (Winter cited by
Salinas 2009, p.12).
In literature, we can essentially find three different perspectives on the
meaning of brand equity: the financial perspective, the consumer perspective
and the integrative perception including both perspectives (Kartono and Rao
2005).
The financial perspective seems to be the origin of the term brand
equity. For Middleton and Dalla Costa (cited by Haigh 1999, p.24) equity in
the context of brands is essentially a financial concept. It is the bottom line –
the specific dollar worth of a product or service, beyond its physical and

13
delivery costs, that is realized because of the impact of its branding. With the
same point of view are Simon and Sullivan (1993) that defined brand equity
as the incremental cash flows which accrue to branded products over and
above the cash flows, which would result from the sale of unbranded
products2
. In this perception the profit results from the differential revenue
between a branded and a generic product (Salinas 2009, p.14).
An alternative view that breaks free from the financial perspective,
highlighting the judgments made by consumers, is the consumers
perspective. This approach of brand equity is regarded by Keller (2002) as
the differential effect that brand knowledge has on consumer or costumer
response to the marketing of the brand. For Keller, brand knowledge is
essentially defined in terms of two components, brand awareness and brand
image. Another well-known approach of brand equity is that of Aaker (1996)
who defined the concept as a set of assets and liabilities linked to a brand’s
name and symbol that adds to or subtracts from the value provided by a
product or service to a firm and/or that firm’s costumers. These assets and
liabilities on which brand equity is based differ from context to context, but in
Aaker’s view, they can be usefully grouped into four categories: brand
loyalty, brand name awareness, perceived brand quality and brand
associations. A simpler concept is from Leuthesser (1988) that refers to
brand equity as a qualitative parameter that is caused by the set of
associations and behaviors on the part of a brand’s customers, channel
members and parent corporation that permits the brand to earn greater
volume or greater margins than it could without the brand name.
Accordingly to Kartono and Rao (2005) studying brand equity solely
from the perspective of either the firm or the consumer may be inadequate.
They justified that while assessing brand equity from the perspective of the
firm can provide a measure of the financial value of the brand to the firm, it
neglects the fundamental basis of the brand equity concept, which suggests
that the equity of the brand its not merely a dollar-metric value but also an
2
The incremental cash flows are based on the value consumers place on branded products
and on cost savings brand equity generates through competitive advantages (Simon and
Sullivan 1993).

14
intangible asset residing in the minds of consumers. Similarly, while
measuring brand equity from the perspective of the consumer gives an
indication of the value that the brand name provides to the consumer in the
form of the consumer’s favorable (or otherwise) attitudes or perceptions of
the brand, or the increase in the consumer’s utility provided by the brand
name, it does not show how these mindset measures can be translated into
more tangible measures of a brand’s financial value or its market
performance, which may be more useful for managers.
Following this, the perspective that we will adopt in this case study is
the integrative perception including both, the financial and the consumer’s
perspective. For Kartano and Rao (2005) this integrative perspective of
measuring and managing brand equity will not only have significant
implications for firms attempting to improve the equity of their brands on both
fronts, but will also be useful in developing a more complete picture of the
brand equity concept. Some researchers such as Aaker and Jacobson
(1994, 2001) and Kim, Kim, and An (2003) have also shown the existence of
a relationship between measures of consumer brand perceptions and the
brand’s financial performance (as cited by Kartano and Rao 2005). Therefore
brand equity not derived merely from the market performance and does not
only consider the consumers estimation. Brand equity provides all the
mindsets and actions of consumers “what we carry around in our heads
about the brand” (Ambler as cited in Glynn and Woodside 2009, p.274) and
simultaneously makes possible to evaluate a monetary value.
1.3. Brand Valuation
Before moving towards an assessment of the brand valuation
requirements and models, it becomes interesting to find out what various
researchers worldwide has to say about brand valuation. Firstly, brand
valuation could be defined as the job of estimating the total financial value of
the brand (Kotler 2002). It is the systematic method of computation of a fair
market price for the brand in the terms of currency (Bakshi).

15
According to Salinas (2009, p.18), the goal of the brand valuation is
indisputably to determine a brand’s economic (monetary) value. For Tauber
(1988), brand valuation current interest stems from the escalating costs of
developing new brands, which as led to prevalent use of brand extension and
international expansion (as cited by Simon & Sullivan 1993). In Fernández
(2001, p.19) opinion, the brand valuation process is very useful, since it helps
identify and assess brand value drivers. But brand valuation is also important
because intangible assets are increasingly been recognized as highly valued
properties (Roberts 2011).
Throughout this work, we will refer to brand valuation according to
Cravens (1999) perspective, which defined brand valuation as a more
comprehensive than costing technique because it relates to the outcomes
and incorporates projections of future income and cash flows.
2. PROBLEM STATEMENT AND ZARA’S PRESENTATION
Throughout this chapter, we are first going to expose the actual
situation regarding to the case in study for then (briefly) present ZARA and
talk about its main competitors and financial performance.
2.1. Problem Statement & Research Question
It has long been recognized that brand names are important
commercial and institutional assets for companies in different business
sectors, but only recently have serious attempts been made to estimate their
value. One of the causes for the current interest in brand valuation is related
to acquisitions. In the existing competitive environment, brands have become
important assets that started to be traded in the market. In this sense, an
upcoming problem arises; how determine the right price on each transaction
of acquisition or merger?

16
This present case is a Hennes & Mauritz AB (H&M) study, which is
analyzing the hypothesis of acquire ZARA’s brand, its closest competitor.
H&M is a Swedish fashion retailer, known for its fast fashion clothing
offerings for women, men, youths and children. H&M has about 87,000
employees and more than 2,200 stores in 40 markets (H&M website). Since
2007, with the aiming of increase market share, H&M has launched and
acquired new companies in the same field of business (annex 1).
At the present, H&M is studying the possibility of acquires ZARA’s
brand and is in this sense that several questions arise; what should be the
right value of H&M offer? How much is ZARA’s brand?
2.2. Zara Presentation
2.2.1. The Company
Established in 1975, in Galicia (north-west Spain), ZARA is the
flagship of Inditex Group and one of the largest global fashion companies. At
the close of 2009, there were 1.723 ZARA stores operating in 77 countries all
over the world (Inditex Annual Report 2010).
In addition to ZARA which accounted for 64,6% of Inditex sales in
2010 (figure 1), the group have seven other endorsed brands: Bershka
(avant-garde clothing), Massimo Dutti (quality and conventional fashion), Pull
and Bear (youth casual clothes), Stradivarius (trendy clothing), Oysho
(undergarment chain), Zara Home (household textiles) and Uterqüe
(complements and accessories).
These retailing chains have an overall structure but were organized as
separate business units. Ghemawat and Nueno (2003) stated that, in effect,
each of the chains operated independently and was responsible for its own
strategy, product design, sourcing and manufacturing, distribution, image,
personnel, and financial results, while group management set the strategic

17
vision of the group, coordinated the activities of the concepts, and provided
them with administrative and various other services.
Figure 1. ZARA’s Sales Contribution by Sales Format
Source: (Inditex Annual Report 2010).
2.2.2. The Concept
According to Amancio Ortega, founder and chairman of Inditex, the
ZARA’s aim is to democratize fashion by offering the latest fashion in
medium quality at affordable prices.
The turnaround time of ZARA’s business system (figure 2) is critical
for its success. ZARA is able to originate a design and have finished goods in
stores within four to five weeks in the case of entirely new designs, and two
weeks for modifications (or restocking) of existing products, what contrasts
with the traditional industry model which involve cycles of up to six months

18
for design and three months for manufacturing (Ghemawat and Nueno,
2006).
Figure 2. ZARA’s Business System
Source: ZARA Harvard Case Study (Ghemawat and Nueno 2006, p.30).
ZARA's products design is one of its most distinguishable features.
The brand designers focused its attention on understanding the fashion items
that it costumers wanted and create approximately 40.000 new designs
annually, from which 10.000 are selected for production (Ferdows, Lewis,
and Machuca 2004). Consequently, ZARA’s production is subcontracted to
internal or external suppliers, depending on whether the garments are to
fashion or are not subject to seasonal variation, which are responsible for all
of production process. Before reaching the stores, all ZARA’s merchandise
passed through the distribution center in Arteixo. According to Lorena Alba,
Inditex’s director of logistics, the vast majority of clothes are in distribution
center only a few hours, and none ever stayed for more than three days.
The store is where the ZARA’s specific business model begins and
ends (Inditex Annual Report 2009). The costumer’s desires meet the offers of
the design teams in the stores but is also in the stores that the costumer’s
feedback arrived every day. From September 2010 ZARA launched its online
store and at the end of the year the system was operating in eleven
countries.
Although ZARA has never advertised in traditional channels, its main
chain of advertising is the store, which chief characteristics include: preferred

19
locations, meticulously design window displays, unique internal and external
architectural design and tailored coordination of the product (Inditex Annual
Report 2009). Furthermore, ZARA has eight million facebook fans (in begin-
2011) and a several presence on others social media platforms.
2.2.3. Key International Competitors
A Harvard Case Study about ZARA considers that while Inditex
competed with local retailers in most of its markets, its three closest
comparable competitors were H&M, The Gap, and Benetton (Ghemawat and
Nueno 2006, p.4). Figure 3 shows the different position in product space of
these competitors.
Figure 3. A Product Market Positioning Map
Source: ZARA Harvard Case Study (Ghemawat and Nueno 2006, p.23).
Note: Uterqüe is a ZARA competitor but it’s not represented in the figure above because
was only established in 2008 and the figure was performed in 2006.
As mentioned, H&M was considered ZARA’s closest competitor,
although there exist important key differences between them. H&M differs
essentially from ZARA because they outsource all of its production, which will

20
implying longer lead times and spend more money on advertising. The H&M
prices also tended to be slightly lower than ZARA. However, both brands
have important similarities; they are European based companies, in a
segment of fashion forward at lower prices and have a strong international
expansion strategy. Regarding this last point, is important refer that H&M had
been quicker to internationalize, generating more than half its sales outside
its home country by 1990, 10 years earlier than Inditex (Ghemawat and
Nueno 2006, p.5).
The Gap had been founded in 1969, in San Francisco and had
achieved stellar growth and profitability through the 1980s and 1990s with
what was described as an unpretentious real clothes stance. Its store
operations ere essentially U.S.-centric and in 1987 when Gap had begun its
international expansion, they faced certain difficulties in finding locations in
some markets, in adapting to different costumer sizes and preferences, and
in dealing with more severe pricing pressures than in the United States. By
the end of the 1990s, supply chains that were still too long, market
saturation, imbalances and inconsistencies across the company’s store
chains and the lack of a clear fashion positioning had started to take a toll
even in the U.S. market. In 2001 a failed attempt to reposition to a more
fashion-driven assortment, a massive decline in The Gap’s stock price and
the departure, in 2002, of its long-time CEO, Millard Drexler (Ghemawat and
Nueno 2006, p.5) caused a Gap’s loss of competitiveness among its main
competitors and simultaneously Gap’s brand value is decreasing
substantially over the last years.
Benetton is one of the three brands the least that competes with
ZARA. Benetton, incorporated in 1965 in Italy, emphasized brightly colored
knitwear. It achieved prominence in the 1980s and 1990s for its controversial
advertising and as a network organization that outsourced activities that were
labor-intensive or scale-insensitive to subcontractors and sold its production
through licensees. While Benetton was fast at certain activities such as
dyeing, it looked for its retailing business to provide significant forward order
books for its manufacturing business and was therefore geared to operate on

21
lead times of several months. Benetton’s format appeared to hit saturation by
the early 1990s, and profitability continued to slide through the rest of the
1990s. In response, it embarked on a strategy of narrowing product lines,
further consolidating key production activities by grouping them into
“production poles” in a number of different regions, and expanding or
focusing existing outlets while starting a program to set up much larger
company-owned outlets in big cities (Ghemawat and Nueno 2006, pp.5 - 6).
2.2.4. The Financial Performance
In 2010, ZARA net sales was 8.088 thousand of euros, which
represent an increase of 14% regarding to the previous year and EBIT
(earnings before interest and taxes) reached 1.534 thousand of euros, an
increase of 39% over 2009.
According to Interbrand rank about Best Global Brands3
by value
(annex 2), ZARA was positioned at No. 50 in 2009 and its brand value was
6.789 thousand of dollars. In 2010 its position fell two numbers and ZARA
was at No. 48 however, its brand value had a positive variation of 10% and
ZARA’s brand value was 7.468 thousand of dollars. Interbrand express that
ZARA continues to differentiate itself from other fast fashion brands by
offering the highest price points and the closest direct replicas of runway
fashions. It builds value on its responsiveness and relevance.
As we can see in table 1, ZARA belongs to the most valuable brands
worldwide and it comes in fourth on fashion industry, which exceeds some
luxury fashion brands, such as Hermès (ranked at No. 69), Giorgio Armani
(No. 95) and Burberry’ (No. 100). In front of ZARA, ranked at No.21 is H&M,
its biggest competitor. According to Interbrand, H&M irreverently mixes high
fashion inspiration with bold-print low prices, and demonstrates that it knows
the quality of its brand promise is about more than product and price points.
3
Interbrand evaluates brand value on the basis of how much it is likely to earn for the
company in the future. Interbrand uses a combination of analysts projections, company
financial documents, and its own qualitative and quantitative analysis to arrive at a net
present value of those earnings (Bloomberg Business Week).

22
Furthermore, H&M takes responsibility for the integrity of its operation chain,
from employees to materials. The Gap’s value was at No. 84, having fallen of
position No. 78 that ranked in 2009. As a curiosity, the last time that Benetton
belonged to the Interbrand rank about best global brands by value was in
2001, occupying the position No.100.
Table 1. Best Global Brands of Fashion Industry– 2010 Rankings
Source: excerpt from (Interbrand Rank about Best Global Brands 2010).
2.3. A Brand’s Value in the Existing Accounting
Standards
The International Financial Reporting Standards (IFRS) 2008,
recognizes together with the International Accounting Standard (IAS) § 38
(paragraph 1 to 133) the accounting treatment for intangible assets that are
not dealt with specifically in another Standard.
IAS § 38 defined an intangible asset as an identifiable nonmonetary
asset without physical substance and established that an asset is identifiable
when it: (i) is separable (capable of being separated and sold, transferred,

23
licensed, rented, or exchanged, either individually or together with a related
contract) or (ii) arises from contractual or other legal rights, regardless of
whether those rights are transferable or separable from the entity or from
other rights and obligations. Furthermore, an intangible asset shall be
recognized if and only if, (i) it is probable that the expected future economic
benefits that are attributable to the asset will flow to the entity; and (ii) the
cost of the asset can be measured reliably.
In accordance with this standard, an intangible asset shall be
measured initially at cost and the cost of a separately acquired intangible
asset comprises: (i) its purchase price, including import duties and non-
refundable purchase taxes, after deducting trade discounts and rebates; and
(b) any directly attributable cost of preparing the asset for its intended use. In
this sense, IFRS 3 Business Combinations stated that if an intangible asset
is acquired in a business combination, the cost of that intangible asset is its
fair value at the acquisition date. If an asset acquired in a business
combination is separable or arises from contractual or other legal rights,
sufficient information exists to measure reliably the fair value of the asset.
However, IAS § 38 contains additional recognition criteria for
intangible assets. It stated that internally generated brands, mastheads,
publishing titles, customer lists and items similar in substance that are
internally generated should not be recognised as assets, which means that
the value of these assets will not be included in accounting statements.
Following this, we can conclude that the accounting treatment for
intangible assets, in which the brand is included, is different. The internally
generated brands are not recognized and should not appear in balance
sheets, contrary to acquired intangible assets that should be recognized and
its acquisition value must be reflected on its accounting statements.
In practice and in Pablo Fernández view (2001, p.20), it is possible to
assign a value to a brand that has recently changed hands, but the inclusion
“home-grown” brands is particularly risky, because there is no generally
accepted valuation method.

24
3. THE ORIGIN AND THE PURPOSES OF BRAND VALUATION
3.1. Origins: The series of acquisitions in the 1980’s
Brand valuation began to be target for attention in the late eighties. In
this time, the main boost for brand valuation began with the series of
acquisitions, in which strong branded companies were secured at six and
more times their book value (Aaker 1991). By way for example, when the
British company GrandMet acquired Pillsbury in 1988, it paid an estimated
88% of the price as goodwill (Haigh, 1999 – see Table 1).
Examples of Goodwill Payments in the Eighties
Acquirer Seller Goodwill as % of price paid
Nestlé Rowntree 83
Grand Met Pillsbury 88
Cadbury Scheppes Treber 75
United Biscuits Verkade 66
Table 2. Examples of Goodwill Payments in the Eighties.
Source: on the basis of (Haigh 1999).
Beyond that, other acquisitions have shown that brands can create
value and justify high market to book multiples. That’s what happened with
the Nestlé deal to Rowntree. In 24 June 1988, The New York Times
announced that Rowntree P.L.C. today accepted the 2.55 thousand millions
of dollars buyout offer from Nestlé S.A., ending a months-long takeover fight
for the British confectioner, the maker of Kit Kat chocolate bars. This was the
largest foreign takeover ever of a British company. This acquisition was aim
of considerable attention around the world, since various bids to acquire
Rowntree were refused. On this subject, Kenneth Dixon (Rowntree's
chairman in 1988) clarified that the bids were too low for its valuable and
well-recognized brands. In the end, Rowntree was acquired by Nestlé by two

25
and a half times the pre-bid price and eight times the net asset value of the
company.
The overall trend was that acquisition prices for companies with strong
brands were consistently higher than the value of their net tangible assets
(Salinas 2009, pag.34). The Ford Company, for instance, paid 6.2 thousand
millions of euros for the Jaguar brand. Such a high brand value can only be
explained by the existence of knowledge structures that can be efficiently
tapped, i.e. a brand identity that motivates consumers to accept a higher
price, remain loyal to the brand, buy it again and again and recommend it to
others (Zimmermann et al. 2001, p.13). In such cases, the difference
between market value and book value is called goodwill, and could represent
different types of intangible assets, among which the brand seems to be the
most valuable.
In short, brands can be one of the most valuable assets a company
owns, but also tend to be the least understood (Roberts 2011). Is brand
valuation only important for acquisition purposes? How can we measure
brand value? These issues are what we will discuss in the next sections.
3.2. The Purposes of Brand Valuation
There are different purposes to value a brand and every purpose can
be classified by its internal or external scopes of application (Soto 2008,
p.27). According to Salinas (2009, pag.50 based on Haigh and Knowles
2004), we can group them in three distinct applications: valuations for brand
management purposes, valuations for accounting purposes and valuations
for transactional purposes.
Brand valuations for management purposes are typically based on
dynamic business models and on the role that the brand plays in the model’s
key variables. On the other hand, valuations for accounting and transactional
purposes focus on a value at a giver point in time (Salinas 2009, p.51). On

26
table 3 is exhibited an overview of possible reasons to value a brand, which
we will analyze on following.
Purposes
Scopes of
Application
Reasons for Brand Valuation
Brand Management Internal
• Brand strategy
• Budget allocation
• Performance evaluation
• Incentive system for managers
Accounting External • Value of acquired brands must be
included in the balance sheet
Internal
• Trademark-backed securitization
• Tax planning
Transactional
External
• Acquisition of a company
• Mergers of companies
Table 3.Perspectives and Reasons for Brand Valuation
Source: on the basis of (Salinas and Cravens).
Out of curiosity, the study of Price Waterhouse Coopers (PWC), held
in 2006, shows the different scopes of application of brand valuation for
business practices. Steering and controlling of brands plays the most
important role of brand valuation (80%), as well as brand transactions such
as the purchase/sale/merger of firms and brands (57%). Brands conduct also
brand valuation for internal reporting (47%), as well as for external reporting
(30%). Brand valuation will also be conducted for budget allocation (23%).
The trade with brands through licensing agreements is considerable
important for companies, however, only one third of the interviewed company
have actually performed brand valuation for this purpose (26%). The less
common application area for brand valuation is the one for financial and
fiscal purposes (as cited by Soto 2008, p.26).
3.2.1. Brand Management Purposes
Valuations for brand management purposes can provide critical
knowledge that influences brand strategy. The brand valuation process
increases the amount of information held by the company about its brand

27
and it should be developed so that it can be used as a management tool for
value creation (Fernández 2001, p.19). In this sense, brand valuation is an
important parameter to determine budget allocation and to help managers to
decide where they should invest in and disinvest.
Furthermore, brand valuation permits to determine brand strength,
which shows whose components of the brand generates positives
contributions to the company. Pablo Fernández (2001, p.19) stated about
this that a good brand valuation process is a tool that helps maintain a
coherent strategy over time and assign marketing resources consistently.
Thereby, the use of brand valuation helps marketing professionals focus on
the long-term benefits associated with the brand, which increases the ability
of brand to endure and grow (Cravens and Guilding 1999).
Another important reason is to control the brand value, which permits
to compare the value between brands in the brand portfolio and between
competitors’ brands. These value variations should be observed, in order to
take constructive actions to improve it.
Moreover, the performance of brand management can be measured
by changes in the value of the brand, which means that the brand value
works as an incentive system for managers and can be used to determine
manager wage compensation (or bonus). In this sense, is important to note
that management performance was not only based on short-term earnings,
such as sales and profits, but also on long-term perspectives of development
of the brand. Using a long-term perspective allows managers to concentrate
on action that benefit the entire company and that are reflected in the value
of the brand (Cravens and Guilding 1999, p.57).
3.2.2. Accounting Purposes
Regarding to valuations with accounting purposes, is important to
state that current regulations require that all identifiable intangible assets of
acquired business must be recorded at their “fair value”, i.e., the value of

28
acquired brands must be included in the balance sheet (Salinas 2009, p.52).
For this actual regulation, brand valuation is indispensable, which contradicts
with the older practice of recording the purchase price in excess of the net
acquired assets as a single figure under goodwill (Salinas 2009, p.52).
3.2.3. Transactional Purposes
Value a brand by transactional purposes may require two different
types of scopes of application: internal and external.
The main objectives for value a brand in internal transactions are the
trademark-backed securitizations and the tax planning (Salinas 2009, p.53).
In trademark securitization, funds are collected in exchange for collateral
based on future revenues generated by licensing the trademark, i.e.
trademark licensing royalties (Salinas 2009, p.53 based on Eisbruck, 2007).
In this context, brand value is an important indicator of the royalty rates to be
paid from the licensee to the brand holder. Furthermore, brand valuation may
also be used for tax purposes. Usually, subsidiaries transfer brand and other
intellectual property assets to a centralized holding company, which charges
operating companies royalties for the use of this assets, such that a portion
of the operating companies profits may evade local taxes (Salinas 2009,
p.53). Is in this sense that fiscal authorities ask for clarifications of the brand
value, to ensure that local taxes (i.e., fiscal obligations) have been met.
The external transactions are essentially characterized by acquisitions
of companies, which is the main objective of this work, valuate Zara’s brand
for H&M take over. In these transactions, the knowledge of brand value is an
important complement in determining the purchase price. Furthermore, brand
value can also be used as a guarantee for external investors (Soto 2008,
p.31 as based on Kranz 2002). The reasons for the acquisition of companies
could be very different. In this present case study, H&M is considering
acquiring Zara’s brand because of its well-established brand and to get more
market share. Due to increasing competitive market, for companies, it is
usually more attractive and riskless to obtain brand rights through firm

29
acquisition than building a new brand (Soto 2008, p.31 as based on
Bekmeier-Feuerhahn 1998). Further, the buying company can avoid risk of
failure and save some time and costs (Sander 1994, p.54).
3.3. Method Requirements for the Cause of Acquisition
As exposed in the previous section, there are many different reasons
for brand valuation and depending on the reason why a brand is evaluated,
the requirements can vary (Kapferer 2004, p.452).
First of all, when valuing a brand, it is particularly important “for whom”
that value is being determined for, since the brand’s value is not the same for
the company that owns the brand as for a company with a competing brand
or for another company operating in the industry with a brand that does not
compete directly with it (Fernández 2001, p.5). Likewise, it is vitally important
to define “for what purpose” it is wished to determine a brand’s value,
whether it is to sell it, to collect a series of royalties, to facilitate the brand’s
management or to capitalize its value in the balance sheet (Fernández 2001,
p.5).
In this particularly case study, Hennes & Mauritz was interested in
take over its strongest competitor with the purpose of increased its market
share. Thus, it becomes obvious that the value of the brand would be
different for another prospective buyer (Fernández 2001, p.5).
Moreover, when we value a brand, a wide range of information is
gathered about the brand, its performance and its history from a number of
different sources (Haigh 1999, p.11). Because of this, we will expose the
requirements that are important taken into account when we apply the
valuation methods and after, to facilitate the analysis, we will draw up a
checklist with these requirements.
Zimmermann et al. (2002, p.8) listed some general requirements like
validity, reliability and objectivity. Validity and objectivity means that the
valuation methods should be exempt of random errors and must provide

30
stable, exact and consistent results (Bekmeier-Feuerhahn as cited by Soto
2008, p.24). Reliability are required in order to achieved transparency of the
method, because it assured that the results remain the same even if they
were measured at different points of time or by different people (Soto 2008,
p.24).
Further on, the cost-efficiency and feasibility of the valuation
approach, i.e. the requisite time, effort and costs, must be in proportion to the
usefulness of the findings. In other words, the data needed must be easily
available and accessible, not requiring immense effort and investment to
generate them (Zimmermann et al. 2002, p.8).
Additionally, Soto (2008, p.25) points out that a brand that posse a
monetary brand value will be regarded as an investment which creates
futures cash flows. By way of example, for Hennes & Mauritz take over
ZARA worth more than if it would acquire a food company, since it will
eliminate a competitor. However is important refer that brand valuation will
only ever be credible if they were based on reliable forecasts, and reliable
forecasts must be informed with statistical valid historical data relationships
(Haigh 1999, p.29). It means that to represent a complete picture of the
brand’s potential success, we must consider past, present and future data.
A further criterion refers to standardization. Zimmermann et al. (2002,
p.8) stated that a brand valuation approach must allow as wide an application
as possible. The model must guarantee that brands from various sectors as
well as of differing types can be evaluated with equal success.
Finally, it is essential that the brand measured result is expressed in
monetary units, so that this monetary brand value can be compared with the
competitors brands (Soto 2008, p.25) and can be also important for help
corporate management to track a brand’s contribution to shareholder value
(Zimmermann et al. 2002, p.7). In addition, and between others valuations
purposes, identify the monetary value in an acquisition case is certainly
indispensable!

31
The table bellow shows a checklist with the requirements that brand
valuation methods must to fulfill to be suitable for the case of acquisition,
especially regarding to Hennes & Mauritz take over ZARA. To provide a
simplified overview, the requirements will be grouped into three categories:
methodical requirements, covering content and relevance of results.
Categories Requirements
Methodical Requirements
• Validity
• Reliability
• Objectivity
Covering Content
• Cost-Efficiency
• Transparency
• Feasibility
Relevance of Results
• Past oriented-results
• Present oriented-results
• Future oriented-results
• Complete Picture
• Financial Figure
Table 4. Required Criteria for Brand Valuation Methods in Case of Acquisition
Source: on the basis of (Soto 2008, p.26).
4. CLASSIFICATION AND CHOICE OF THE METHODS OF
BRAND VALUATION
Numerous alternative methods are currently in use, but there little
agreement as to their relative strengths and weaknesses (Lipman 1989 as
cited by Simon and Sullivan 1993). On this section, we will address the
different approaches and methods of brand valuation, with the aim of
selecting three suitable methods to analyze in detail and thereafter choose
one of them to calculate ZARA’s brand value. The approaches that we
present in this part will be discussed in general, while those selected will be
deeply discussed in part two of this study.

32
4.1. The Different Approaches
In literature, we can find at least 39 different proprietary valuation
models for commercial brands4
that have been proposed by different
providers and scholars (Salinas 2009, p.57). These models can be classified
by different criteria and grouped on distinct approaches5
. Similarly to the
definition of brand equity (see chapter 1.2), we will group the brand valuation
methods in three different approaches, the financial, the consumer’s
perspective and the integrative perception of both approaches (figure 4). The
financial approach valuation methods quantify a monetary value for brand
equity, and the consumer’s perspective is not taken into account. By
contrast, the valuation methods which approach is the consumer’s point of
view consider qualitative determinants to compute brand’s value like brand
images and the associations the brand evokes. The integrative methods
interlink the financial approach to the consumer’s point of view, i.e., the
quantitative and qualitative methods.

4
Commercial brand is defined as a product or a service Brand, as opposed to corporate
brand (Salinas 2009, p.57).
5
Approach refers to the general ways in which any kind of asset can be valued (Salinas
2009, p.57).

33
• Quantitative procedures to compute a
monetary value for brand equity
• Consumer’s perspective not taken into
account
• Used to value brand equity in the context of
acquisitions, licensing and analyst’s opinions
• Brand equity seen as a qualitative construct
that can be made manifest using scorecards
• High degree of subjectivity in the choice of
factors explaining brand strength
• Endeavor to explain what goes on in the
“hearts and minds” of customers to determine
a brand’s value
• Provide a monetary value for brand equity
• Include variables covering earnings status,
market status and psychographic status of a
brand
• Interlink qualitative and quantitative factors
Financial
Composite
Financial/
Consumer’s
Perspective
Consumer’s
Perspective
Brand
Valuation
Approaches
Figure 4.Characteristics of Brand Valuation Approaches
Source: adapted from (Zimmermann et al. 2001).
4.1.1. Financial
The methods of financial approach consider the financial market
performance data to determine a monetary brand value. This value can be
explained by the contribution made by a brand – in effect, its utility value –
that derived from the entire range of performance generated by a product
concept. Customers overall willingness to pay for a product is used to identify
their willingness to pay for specific product features, one of which is the
brand itself, and its value can be ascertained as a result (Zimmermann et al.
2001, p.21).
The financial approach can be also subdivided into cost, market and
income approaches, as we can see by the following figure.

34
Market IncomeCost
Financial
Approaches
Brand Value
(based on)
Replacement
or
Reproduction
Cost
Brand Value
(based on)
Value of
Comparables
Brand Value
(based on)
Future
Income
Capitalised to
Present Value
Figure 5. Financial Approaches
Source: (author).
In the cost approach the value of a brand is determined by considering
the cost of developing it (brand acquisition, creation or maintenance) during
any and all phases of its development (Salinas 2009, p.58). It is defined
under the International Organization for Standardization (ISO)6
: 10668 as the
value of a brand based on the cost invested in building the brand, or its
replacement or reproduction cost… Note: It is based on the premise that a
prudent investor would not pay more for a brand than the cost to replace or
reproduce the brand. The actual cost invested in the brand shall encompass
all costs spent on building the brand up to the value date.
The market approach is focalized principally on comparables. When
information of market transactions involving comparable brands is available it
is possible to estimate one brand’s value by comparison to another brand
(Haigh 1999). It is defined by ISO: 10668 as the measures value based on
6
The International Organization for Standardization (ISO) is one of the world’s biggest
developers and publishers of international standards, that published, in 2010, a model
designated BSI ISO: 10668: Brand Valuation: Requirements for monetary brand valuation.
The document specifies a framework for brand valuation, including objectives, bases of
valuation, approaches to valuation, methods of valuation and sourcing of quality data and
assumptions. It also specifies methods for reporting the results of such valuation (ISO
website).

35
what other purchasers in the market have paid for assets that can be
considered reasonably similar to those being valued. The application of the
market approach shall result in an estimate of the price reasonably expected
to be realized if the brand was to be sold.
The income approach requires the identification of future income,
profits or cash flow attributable to the brand over its expected remaining
useful life, and discounting or capitalizing them to present value (Salinas
2009, p.63). According to ISO: 10668 the income approach measures the
value of the brand by reference to the present value of the economic benefits
expected to be received over the remaining useful economic life of the brand.
One of the advantages of these models has directly to do with the
data sources they need. Because they are based entirely on figures from
within the company, there is no need for costly, time-consuming efforts to
gather external data. A further benefit is that the models are relatively easy to
use, allowing brand value to be computed swiftly and economically
(Zimmermann at al. 2001, p.21).
However, the methods of the financial approach are not out of some
drawbacks. The result produced by all these models is the brand’s monetary
value from an accounting perspective. Because they ignore the consumer’s
role in the generation of brand value, some important information is lost, or
rather it is not even recorded in the first place (Zimmermann at al. 2001,
p.21). In the Zara case, for example, the brand has become, in a short time,
one of the most valuable brands worldwide. So, it seems to be very important
to include in the brand valuation some past variables and the reasons for the
brand fast rise.
Another point of criticism, this time from an analyst’s perspective, is
that some methods of this approach do not take the competitive environment
into account when arriving at a valuation (Zimmermann at al. 2001, p.22).
Zara is a fast fashion brand that competes strongly with H&M and others
fashion brands so; Zara’s competitive environment must be taken into
account when we calculate its brand value.

36
In short, the methods of financial approach, per se, don’t offer an
adequate basis for determine a brand’s value because they don't consider
qualitative variables that also influence brand values.
4.1.2. Consumer’s Perspective
Accordingly to the definition of brand equity (see section 1.2), the
methods of brand value that consider a consumer’s perspective approaches
have their primer focus on the customer’s judgments. These models include
brand strength parameters like brand loyalty, brand name awareness and
brand sympathy to achieve brand equity. In this context, brand value is
viewed as an essentially qualitative construct, which can be made manifest
using scorecards (Zimmermann at al. 2001, p.22).
These models set out to explain what goes on in the “hearts and
minds” of consumers. In contrast to the financially focused models, they
provide those responsible for brand management with an understanding of
where the value of a brand actually comes from. This way, they paint a
precise picture of how brand strength is generated. The information they
provide helps to identify reasons for a loss or gain in value and to track
brand-value trends, making them much more suitable for brand management
than their counterparts based on business finance (Zimmermann et al. 2001,
p.22).
However, in addition to these benefits, the methods of brand equity by
a consumer’s perspective also present some weaknesses. Firstly, the
psychographic recordings of brand value are not converted into any objective
monetary value (Zimmermann et al. 2001, p.22), which does not allow us to
answer the question that arise in the context of acquisition, indispensable for
this case study.
Another point of criticism is directly involved with the choice of
variables used to explain brand strength and the generations of brand value.
These variables have a high degree of subjectivity and they may not really be

37
mutually independent, which contradicts with an important methodological
assumption. In addition, empirical validation is also difficult in these methods.
A further problem that needs to be viewed critically is the fact that
these models completely ignore certain aspects of business administration
such as competitor’s strategies or general market developments. Yet these
are factors that could easily have a retarding impact on brand development
and ought therefore to play a role in the valuation process (Zimmermann et
al. 2001, p.22).
In short, the methods of consumer’s perspective approach, per se,
don’t offer either an adequate basis for determine a brand’s value. Although
they consider qualitative variables that the methods of financial approach
ignore, they are not sufficient to valuate ZARA’s brand (for the cause of
acquisition), because they don’t take into account an objective monetary
value.
4.1.3. Integrative Methods
These third category of brand valuation methods, known as the
integrative methods, arise in the attempt to overcome the drawbacks of the
methods of financial and consumer perspective approaches.
Also accordingly to the definition of brand equity presented in 1.2, the
integrative methods take into account variables depicting the position held by
a brand as a result of customer’s purchasing behavior, which can be
aggregated into the following combined variables: the earnings status,
market status and psychographic status of a brand. These qualitative and
quantitative factors are drawn together in each model, in order to compute a
monetary value for the brand (Zimmermann et al. 2001, p.23).
However, also the integrative methods are not free of criticisms.
Firstly, the choice of the determinants that contribute for brand valuation and
the relative weightings of the factors have a high degree of subjectivity. This
problem is compounded by the fact that the procedure used for the actual

38
calculation of a monetary value is sometimes undisclosed, or may be subject
to arbitrary assumptions (Zimmermann et al. 2001, p.23).
Another critical observation is related to the combination of the
financial and the consumer’s perspective determinants. When the brand
value is calculated, parameters of both methods are included however the
preponderance of each parameter will determine the dominant approach.
According to Zimmermann et al. (2011, p.23), the result is a conflation of
input and output levels in a production function for brand equity.
As a final critical point, verified in most of the models, is the lack of
adaptation of the integrative models according to the purposes of valuation.
This means that the procedures applied cannot be adapted for the present
case of acquisition of ZARA’s brand, and beyond that is impossible to
consider different requirements inherent to the case.
4.2. The Selected Methods
It is worth noting that none of the approaches reviewed was free of
criticisms. Throughout the work, we looked the various approaches for brand
valuation and presented the list of requirements that a brand valuation model
ought to fulfill (chapter 3.3). However, in addition to these requirements and
accordingly to the definition of brand equity adopted for the present case
(chapter 1.2), another essential requirement must be assured for a critical
estimation of ZARA’s brand value. Such requirement is the balance between
financial and consumer’s perspective approaches. This means that one of
the methods within the integrative methods must be chosen and both
dimensions, qualitative and quantitative, will be taken into consideration
when valuing the brand.
The first method that we will analyze in the following part of this study
is the Brand Rating. It is a method with a high acceptability because beyond
take into account the financial and the consumer’s perspective it also reflects

39
the brand future potential. In practical terms, Brand Rating is an easy method
to use and understand.
The following one will be BBDO Brand Equity Evaluator®. In my
opinion, the research undertaken by BBDO in 2001 and 2002 and published
in two papers (cf. Zimmermann et al., 2001 and 2002), were one of the most
complete materials that I have found about the subject under study. In
addition, they show greater academic rigor and professionalism. Another
aspect that was on the basis of its choice was the fact that the purpose of
brand valuation is taken into consideration when we value a brand.
The third and final method that we will analyze is the Interbrand
Model. It is the most popular brand valuation method worldwide and its brand
consultancy was the first, in the world, to achieve, the ISO 10668 certification
(in 2010). As mentioned in chapter 4.4.1, ISO 10668 is the international norm
that sets minimum standard requirements for the procedures and methods
used to determine the monetary value of brands.

40
PARTE II – METHODS OF BRAND VALUATION
Over this part of the work, we will theoretically present the three
selected methods of brand valuation, the Brand Rating, the BBDO Brand
Equity Evaluator® and the Interbrand for subsequently analyze them in a
critical way. The objective is to choose from the different methods studied the
one that seems preferable to value ZARA’s brand.
The final chapter, as the name suggests, reports the problems and
limitations faced throughout the valuation.
5. Presentation and Critical Analysis of the Selected Methods
5.1. Brand Rating
5.1.1. Method Presentation
The Brand Rating model was designed, in 2000, by the Icon Added
Value and Dr. Wieselhuber & Partner consultancies. Following the model
development, they founded a company with the same name.
In accordance with the requirements established in section 4.2, the
Brand Rating valuation system is a consumer-oriented, monetary model for
determining brand value. It is based on the assumption that brand value must
be measured above all in the heads of consumers (Zimmermann et al. 2001,
p.61).
The analysis of this model can be divided in three different steps7
, or
modules, that comprise the icon iceberg, the discounted price differential and
the brand future score (Zimmernann et al. 2001, p.61).
7
Some authors make a different division of analysis of the Brand Rating model. For
example, Salinas 2009 (pp.158-164) divides the Brand Rating brand valuation method in six
modules. In this study, we adopted the BBDO (Zimmernann et al. 2001) division because is
more clear to perceive. However, at final, the components analyzed are the same
independently of the methodology used.

41
•Brand awareness
•Subjective perception of
advertising pressure
•Memorability of advertising
•Brand uniqueness
•Clarity of internal image
•Attractiveness of internal
image
•Brand appeal
•Trust in brand
•Brand loyalty
The icon iceberg analysis is based on the Icon Brand Trek approach
that is purely based on the principles of behavioral science. It is often
represented by the image of an iceberg, because the process followed to
value a brand uses an analogy to the iceberg.
Figure 6.Icon Iceberg
Source: BBDO – Brand Equity Excellence (Zimmernann et al. 2001, p.49).
As illustrated in figure 6, the brand image constitutes the elements of a
brand that are visible to consumers, i.e. the short term measures in the
marketing mix - such as product and packaging design, advertising,
promotions, events, etc. – that are perceived by buyers. The brand assets
make up the portion of the iceberg that is under water. They represent
longer-term changes in consumer attitudes and also include earlier
investments in the brand that exist beneath the surface more or less as
assets (Zimmernann et al. 2001, p.49). In the figure, we also can observe the
nine factors of market value that represent the brand image and the brand
assets. These factors can be collected by individual interviews in the relevant
marketing target group. Therefore, the sum of the brand image and the brand
assets represents the brand strength index. The contribution of each
dimension to determine brand value will depend on the brand’s age. This is
easily perceptible, since the brand assets components take time to develop.

42
According to icon’s concept (as cited by Zimmernann et al. 2001, p.49)
though brand assets do have a more direct connection with the success of a
brand, they can only be influenced via brand image. The identified brand
values for the individual indicators making up the brand iceberg can be
compared using icon’s database, which contains corresponding reference
values for the respective sector or product area. This system offers an
indication of the realms in which a brand will be perceived more positively or
less positively than the industry average, making it possible to benchmark.
The second module will validate the iceberg analysis through the
calculation of the discounted price differentials, or price premium. The price
differential ∆p can be measured by comparing the price of a branded product
with that of an unbranded one that is in the same category. According to
Brand Rating, the central task in determining the price bonus is to identify a
suitable benchmark product or group of products, compared to which the
price differential can be measured (Biesalski and Sokolowski, 2008 p.6 as
cited by Salinas 2009, p.160). To avoid distortions, the value of the price
differentials is an average of the past three years. The achieved price
differential arrived at by price analysis in the target market is then validated
against the perceptions of the target group or perceived price differential. The
price differential ∆p is then multiplied by the number of units sold q (Salinas
2009, pp.160-161) to obtain the cumulative sales premium and discounted
using an interest rate i that accounts the industry-specific risk premium, as
well as the brand-specific risk (Salinas 2009, p.161). The final value
obtained represents the earning-capacity value of the brand, i.e., the brand
added value.
The following and last step is the brand future score and according to
Zimmernann et al. 2001 (p. 61) it reflects future values and quantify curves.
The Brand Rating determines an index that describes the brand potential (for
example, in terms of its capacity to access new distribution and expand into
new segments) and represents the existing brand protection. Thus, the brand
future score allows one to forecast the brand added value into future periods
(Salinas 2009, p.161).

43
In the figure below, we can schematically see the Brand Rating
“formula” to calculate brand value. The icon iceberg index, the discounted
price differential and the brand future score are linked algorithmically
however, Brand Rating does not divulge the combination of these algorithms.
Figure 7.The Brand Rating “Formula”
Source: BBDO – Brand Equity Excellence (Zimmernann et al. 2001, p.62).
5.1.2. Critical Analysis
Since its development, the Brand Rating method had a practical
acceptance in the brand valuation area due to its objectivity, validity and
reliability. The first advantage to notice, that according to this study is an
essential requirement (established in section 4.2) is the balance between
financial and consumer’s perspective approaches, that is present by the
combination of the discounted price differential with the icon iceberg.
Other positive aspects are related the fact that strategic brand
potential and industry-specific risk premium are taken into account. In
addition, the price-premium is determined based on a three-year average,
avoiding upward or downward distortions. On the other hand, and this time
out as a disadvantage is the fact of being required an unbranded product for
every category of products that we want to evaluate.

44
Another drawback to refer is the time consuming in data collection, by
individual interviews, for the Icon Iceberg analysis.
An arguable statement was in the Brand Rating website, that says that
brand value originates and evolves in the heads and hearts of the target
group. Brand value is therefore independent from current cost structures and
corporate revenue (as cited by Salinas 2009, p.163). This means that Brand
Rating assumes interdependence between brand image and brand assets
and consequently they should not be combined in the determination of brand
value. This assumption can became the model unfeasible, for example, if the
brand image indicators offset the brand asset ones.
To conclude remains the undisclosed question: how are the three
components of Brand Rating algorithmically linked? The table below shows
with which required criteria for brand valuation (see section 3.3) is Brand
Rating complying or not.
Categories Requirements Brand Rating
• Validity
• Reliability
• Objectivity
✓
✓
✓
Covering Content
• Cost-Efficiency
• Transparency
• Feasibility
✗
✗
Limited
✓
✓
✓
Limited
✓
Table 5. Fulfilled Criteria by Brand Rating Brand Valuation Method
Source: (author).

45
5.2. BBDO Brand Equity Evaluator®
The BBDO Germany group has developed two brand valuation
models independently: the Brand Equity Evaluation System® (BEES) and the
Brand Equity Evaluator® (BEE), in 2001 and 2002 respectively. In 2004, the
BBDO jointly with Ernst & Young created the BEVA, Brand Equity Valuation
for Accounting that such as the name suggests, it was created to satisfy
accounting and marketing requirements.
The model that we chose to analyze is the Brand Equity Evaluator®,
that is based in the BEES method. The greater feature of BEE is its modular
design, which allows that the approach to apply varies with the purpose of
the valuation.
Accordingly the established requirement in section 4.2, the BEE is an
integrative approach that includes all dimensions in the valuation of the
brand: the environment or the market in which the brand operates, the
brand’s position and capacity to control the market, the orientation of the
brand, which connects the brand with its potential for global development, the
consumers perception of the brand and the cash flow the brand generates for
the company.
Hereupon, the brand valuation process consists in four stages: (i)
valuation of the brand equity determinants, (ii) computation of the cash flow,
(iii) calculation of the discount rate and finally, (iv) the determination of the
brand equity. In the picture below, is illustrated the process to calculate the
brand value for acquisition applying the BEE, which we will clarify
subsequently.

46
Figure 8.Process to Calculate Brand Equity for the Purpose of Acquisition Applying the
BBDO Brand Equity Evaluator®
Source: BBDO – Brand Equity Excellence Vol. 2 (Zimmernann et al. 2002, p.23).
The BEE model references four brand equity determinants, that are:
the market quality, the dominance of the relevant market, the international
orientation and the brand status. The market quality component describes
the environment in which a brand operates. Depending on the brand type,
this includes the brand’s industry and/or relevant market. This factor is
gauged by means of the following indicators for each industry, or other
relevant market defined on a different scale: sales performance, net
operating margin and degree to which sector is brand-driven (Zimmermann
et al., 2002, p.17). The second determinant is the market dominance that
analyze which market is more important for the brand, that all local and
foreign markets. This factor refers to the brand’s sales strength relative to
competing companies in the same sector and the resulting value can be
interpreted as an indicator of the brand’s potential for dominance of the
relevant market (Zimmermann et al. 2002, p.17). The international orientation
is defined as the brand sales at foreign markets relative to the total sales of
the brand and is interpreted as an indicator of the brand’s potential for
international development. The last component is the brand status and is
expressed as the brand strength and attractiveness perceived by consumers.

47
To determine the brand status, the BEE uses the BBDO Five-level Model®
(illustrated in figure 9) however, no distinction is made between industries. At
the end of the analysis, the four components are fused into a weighting
factor.

Figure 9.The BBDO Five-level Model®
Source: BBDO – Brand Equity Excellence Vol. 2 (Zimmernann et al. 2002, p.19).

The BBDO Five-level Model® assumes that a brand with strength will
ascend to higher developmental levels in the model. Accordingly, a brand
must first pass through a lower development level to reach the next highest
level8
(Zimmermann et al., 2002, p.17).
The analytical process of the BEE method starts with the calculation of
the cash flow (formula for cash flow computation in annex 3). Since the
acquisition is the purpose of our valuation, the BEE determined that this
analysis should be based on forecast gross cash flow values for a planning
horizon of three years – a period within can be determined in a higher rate of
precision9
.
8
Exceptions to this rule are, of course, possible: A brand may on occasion “skip” a level in
the brand development process and “make up for it” later (Zimmermann et al., 2002, p.19).
9
According to Zimmermann et al. (2002, p.22), forecasts of cash flow over longer periods
are subject to extreme uncertainty; even experts with far reaching knowledge of their
industries are not in a position to make concrete, well grounded forecasts for such an
extended timeframe. This is particularly true of brands in fast-evolving sectors.

48
Due to the existence of time value of money, the gross cash flow
calculated from the brand in different moments in time must be discounted at
the moment of its valuation. Therefore, the next stage consists in determine
the discount rate through the CAPM (Capital Asset Pricing Model)10
.
Finally, the last step consists in multiply the discounted gross cash
flow value (the monetary basis) by the weighting factor to have the brand’s
value.
The first factor that awoke me interested for choosing this method was
its adaptability to the purpose of the valuation, which make it a more
objective method. Once we will determine the ZARA’s brand value for H&M
consider the possibility to acquiring it, this method determines the ZARA’s
brand monetary value taking into account the financial data, the consumer’s
opinions about the brand, the environment in which the brand operates as
well as its future development. That means that BEE regards the brand in a
long-term context, considering the past, the present and the future strength
of a brand.
According to my justification in the choice of the method (in section
4.2), when I regard the Zimmermann et al. (2001 and 2002) papers the most
complete materials that I have found about brand valuation, with a greater
academic rigor and professionalism, I can consider the BEE a reliable and
feasible model for brand valuation.
Notwithstanding by the advantages of the model, the disadvantages
should also be mentioned. It’s open to dispute if the described method
includes other brand equity determinants despite the considered four –
market quality, market dominance, international orientation and brand status.
This doubt arises because Zimmermann et al. (2002) suggest that the choice
10
CAPM:
€
re = rf + (Rm − rf )* βe , where
€
re is the return required by the shareholder,
€
rf is
the risk-free interest rate (generally flat yield),
€
Rm is the expected market return, and
€
βe is
the beta factor, i.e., the stock’s sensitive to market movements.

49
and weighting of the components or brand value determinants are based on
the purpose of the valuation and the type of brand being valued (corporate
vs. product brand). But it is not clear if any other components are considered
outside of these four. If so, the choice of brand equity determinants would be
arbitrary (Salinas 2009, p.126). Thus, BEE is not transparent and the results
may not represent a complete figure of the brand to be valuated.
In addition to that, and also regarding with the brand value
determinants, more specifically with the determination of the brand status by
the BBDO Five-level Model®, is that this model does not distinguish between
industries, which runs counter with the valuation of the others brand equity
determinants.
Another weakness important to mention is the determination of the
market quality weighting factor. To support that, the Salinas (2009, p.126)
explanation is clear: the BBDO model first calculates the present value of
gross cash flow, which would be quite similar to the value of the company (or
identical in the case of the corporate brand). A percentage calculated in
function of the brand equity determinants is then applied to the present value
of gross cash flow. However, no BBDO report makes reference to any
empirical study that supports the validity of this relationship.
The last problem we will refer is related to the cost-efficiency of the
model. All data needed for the analysis are obtained from the publicly
available sources however, some data regarding to the consumers opinion
take time to be achieved. Hereupon, and since we did not find available
information about the costs and time of the BEE application, we consider that
this model is not cost-efficiency.
The following table gives a final overview of the requirements that the
BBDO BEE fulfills and not, in accordance with its objectives set out in section
3.3.

50
Categories Requirements BBDO BEE
• Validity
• Reliability
• Objectivity
Limited
✓
✓
Covering Content
• Cost-Efficiency
• Transparency
• Feasibility
✗
✗
Limited
✓
✓
✓
Limited
✓
Table 6. Fulfilled Criteria by BBDO Brand Equity Evaluator® Brand Valuation Method
Source: (author).
5.3. Interbrand
Interbrand was founded by John Murphy in 1974, in London, with the
name Novamark. In 1988, Interbrand, jointly with the London Business
School, developed the first brand valuation methodology, known as the
multiplier model (or “Annuity” model). Some years later, in 1993, they
partially revised it to the discounted cash flow model, and reported that this
second method replaces the first one. Since then, Interbrand, a full-service
brand consulting firm, has valuated some 3500 brands for nearly 400
companies (Interbrand Zintzmeyer & Lux, p.4).
The Interbrand valuation method that we will expose below is the
discounted cash flow model, which has an integrative approach, considering
financial and behavioral aspects (Interbrand Zintzmeyer & Lux, p.4). It is
based on the premise that the value of a brand was the present worth of the
benefits of brand’s future ownership.
As we can see in figure 10, the method is essentially based in three
economic functions: 1) the brand’s function to create cost synergies, 2) the
brand’s function to generate demand for the products and services and, 3)

51
Net Present Value of Brand (segment) Earnings
Segmentation of the Brand
Financial Analysis
Economic Value
Added (EVA)
Role of Brand Index
(RBI)
Demand Analysis Strength Analysis
Brand Strength
Score (BSS)
Brand Earnings Brand Risk
(Discount Rate)
the brand’s function to secure future demand and thus reduce operative and
financial risks (Interbrand Zintzmeyer & Lux, p.2).
Figure 10. Overview of the Interbrand Method
Source: on the basis of (Interbrand Zintzmeyer & Lux).
The segmentation consists on determining homogenous costumer
groups for which we will determine, on an individual basis, the brand value. It
means that the brand value must be calculated for each individual segment
and, at the end, the sum of all brand values segments constitutes the final
brand value.
The first analytical step of the Interbrand model is the financial
analysis. It aims is to determine the Economic Value Added (EVA)11
which
tells whether a company is able to generate returns that exceed the costs of
capital employed, by isolating brand earnings from other forms of income
(Interbrand Zintzmeyer & Lux, p.2). To avoid a distorted view of reality, the
forecast of future revenues is based on historical profits.
11
Interbrand, in its commercial literature, used synonymously the terms "EVA”, “intangible
earnings” and “economic profit”.

52
Once determined the intangible earnings, the following step is to
isolate the earnings that are specifically attributable to ZARA brand. For this,
we will examine what factors influence demand and motivate customers to
purchase, such as quality, location, availability, image, service, value for
money, recommendation, among others. These factors are weighted in terms
of their bearing on demand and for each, the contributions of the specific
associations with the brand are statistically calculated. Them sum of these
brand contributions on the demand drivers is expressed as the Role of Brand
Index (RBI) which, multiplied with EVA, yields the brand earnings (Interbrand
Zintzmeyer & Lux, p.3). To date, Interbrand does not reveal how the index
could be exactly calculated.
The following step of our valuation is known as brand strength
analysis. The purpose of this stage is to analyze the risk of a brand by
comparing it with its competitors on the basis of seven factors - i.e. market,
stability, brand leadership, trend, brand support, diversification, and
protection (Interbrand Zintzmeyer & Lux, p.3). From here results the Brand
Strength Score (BSS), which measures the competitive strength of the brand.
To determine the brand risk profile, i.e., the brand discount rate, we
need to transform the BSS into an S-curve (see figure 11). According to
Salinas (2009, p.228), the model assumes a relationship between brand
strength and discount rate, the higher the brand strength score, the lower the
discount rate, ceteris paribus. Interbrand Zintzmeyer & Lux (p.3) added that
the S-curve procedure reflects the dynamism of the market, where brands at
the extreme ends of the scale react differently from brands in the middle
range as regards changes in their strength.
The value of the brand is then the future brand earnings discounted at
present value (by the brand discount rate) and an annuity or perpetuity is
added as a terminal value. Note that this is the value of the brand segment.
To conclude the valuation, we will need to sum all of brand segments values.

53
Figure 11. S-curve
Source: (author).
Starting with the positive aspects, Interbrand is a universal valid and
reliable method, that have a practical acceptance. Similarly to the previous
methods analyzed, the model has an integrative approach, that considers the
costumers feelings and opinions related to the brand but at the same time
takes into account the past, present and future financial data.
A point to highlight is the fact of the method only considers in its
calculation the intangible earnings allocated to the brand. This is a
controversial topic and according to that Seetharaman el al. (2001) argued
that the calculation of brand earnings within the framework of this model
should only consider factors related to brand identity. However, this condition
is rather restrictive, as it is difficult to separate certain functions from the
brand. For example, even when a distribution system is not a component of a
brand’s identity, it supports the brand by contributing to its success.
The first drawback pointed out by several authors, such as Salinas
(2009, p.230), Fernández (2001, p.15) and Zimmernann et al. (2001 p. 56) is
the higher subjectivity of some parameters. For Salinas (2009, p.230), the
determination of the number of demand drivers, their relative importance and
the role of the brand in each one, is rather subjective, even when based on
statistical analysis of market research data. Beyond the subjectivity of the
0 Brand Strength Score 100
Brand Risk/
Discount Rate

54
brand strength analysis, is important to emphasize that future earnings are
also speculative however, they are an important part on brand valuation,
especially when its main purpose is a case of acquisition.
Still relatively to subjectivity, Pablo Fernández (2001, p.15) stated that
valuing any brand using this method seems highly subjectivity, not only
because of the parameters used but also because of the methodology itself.
About it, the only thing that we can say is that the method was not fully
disclosed and its implementation seems to be complex. Hereupon, we can
also appoint its lack of transparency as a disadvantage.
We cannot find information about the cost-efficiency of the Interbrand
model. What we can deduce is that the method requires a lot of external
information (especially for the analysis of the consumers behaviors) and how
much information is needed, the more time it takes to determine the brand
value. On table 7 is summarized our critical analysis of the Interbrand
method, accordingly with the requirements that a brand valuation model must
to fulfill to be suitable for the case of acquisition.
Categories Requirements Brand Rating
• Validity
• Reliability
• Objectivity
✓
✓
Limited
Covering Content
• Cost-Efficiency
• Transparency
• Feasibility
✗
✗
✓
✓
✓
✓
Limited
✓
Table 7.Fulfilled Criteria by Interbrand Brand Valuation Method
Source: (author).

55
5.4. The Choice
The choice of the three methods presented and critically analyzed,
had the essential requirement to be an integrated approach (chapter 4.2),
i.e., a balance between financial and consumer’s perspective approaches.
Following that, and taking into account the case of Zara acquisition, probably,
the main advantage of the three brand valuation methods discussed is that
all of them give a financial value. In addition, the Brand Rating, the BBDO
Brand Equity Evaluator® and the Interbrand are brand valuation methods
that have a practical acceptance by the market, which could facilitate the
negotiations between Zara and H&M.
A critical and curious point that we feel important to emphasize is that
the three methods studied can be applied for different purposes, including
the acquisition. However, none of the methods takes into account the
elimination of a competitor. For our case in study, that aspect seems to be
relevant, since H&M would eliminate its biggest competitor by taking over
ZARA.
Returning to the objective of this work, we want to value ZARA brand
for inform H&M what should be the value of its offering to take over ZARA. In
this way, the next step is to choose a method, between the three presented
models, that we will apply to valuate ZARA.
To apply a model of brand valuation is important that its methodology
has been disclosed. Additionally to that, is essential a good practical
acceptance by the market for the method. Thus, the method that seems to
be the most appropriate to value ZARA brand is the Interbrand Model.
Although its methodology has not been disclosed in full, this is one of the
most recognized methods by the market (Interbrand Zintzmeyer & Lux, p.3),
which contributed for the success of Interbrand’s brand valuation method.
Throughout the next chapter, in section 6.1, we will value ZARA brand
applying the Interbrand model and thereafter, in 6.2, we will analyze the
results obtained and test its sensitivity to (some) input variables.

56
6. ZARA BRAND VALUATION BY INTERBRAND METHOD
6.1. Calculation of Brand Value
As we saw in section 5.3, the Interbrand model, to calculate brand
value, uses a five-stage process that comprises: segmentation, financial
analysis, demand analysis, brand strength analysis, and, finally, the
calculation of the net present value of brand earnings (Interbrand Zintzmeyer
& Lux, p.2).
6.1.1. Segmentation
According to Interbrand, consumer’s purchasing behaviors and
attitudes towards brands differ from one market sector to another, depending
on product type, distribution and other market factors. For this reason, the
value of a brand can only be determined precisely through the separate
assessment of individual segments that represent a homogenous customer
group.
Following this, we can segment ZARA market, for example, by
separate its different channels (women, men, trafaluc and kids) from the
different 77 countries (Inditex Annual Report 2010) where the brand is
present (see figure 12).
After brand valuation has been made for each segment, the overall
value of a brand is the sum of the different segment values. In this
particularly case of ZARA brand valuation, we cannot consider the market
segmentation because we will not have access to the necessary detailed
information. Thus, we will just value ZARA brand as a whole.

57
Figure 12. Example of ZARA’s Market Segmentation
Source: (author).
6.1.2. Financial Analysis
As mentioned, the financial analysis is the first analytical step of the
method in application. What we want to determine is the Economic Value
Added (EVA) that indicates if ZARA is capable of create returns above the
cost of capital employed, by isolating brand earnings from other forms of
income.
As valuation may be distorted by an unrepresentative profit in the
present year - 2010, the brand value calculation includes a three-year
weighted average of historical profits to project the four following years.
On the table below is analytical represented the process used to
determine EVA.
Brand
Women
Men
Trafaluc
Kids
France
Portugal
etc.
France
Portugal
etc.
France
Portugal
etc.
France
Portugal
etc.

Multimedia associa pdf_tm-zara

Multimedia associa pdf_tm-zara

Recommended

Recommended

More Related Content

Similar to Multimedia associa pdf_tm-zara

Similar to Multimedia associa pdf_tm-zara (20)

More from Akshay Gaikwad

More from Akshay Gaikwad (20)

Recently uploaded

Recently uploaded (20)

Multimedia associa pdf_tm-zara