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Factors Influencing Brand Loyalty Among Notebook Users

4988 words (20 pages) Essay in Marketing

15/01/18 Marketing Reference this

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In this new era of globalization, the rapid development of the technology is growing so fast and more challenge to manufacturers or marketers. A huge number brand of notebook was in the market and more competitive among the manufacturer. It is easily to customers or users to switching to another brand if they feel not satisfied with current brand and choose the better notebook brand. So this study was to determine the factors that influencing brand loyalty among notebook users. The data was collected by questionnaire survey at Universiti Utara Malaysia. This study found that satisfaction is the most factors that can influence users loyal to the notebook brand.

CHAPTER 1:

INTRODUCTION

1.1 Background of Study

In this era of globalization, rapid development in technology is not something strange and familiar to us. Advances in telecommunications, information system and society knowledge is in line with changes occurring in technology. Furthermore, in this 21st century, the international community has shifted from the industrial era into the era of information technology without borders. As well as the growth of new technology devices such as mobile phones, laptops, cameras, and others where many additional features offered in these devices.

Once a notebook may be categorized as luxury goods, but with the times as well as improved quality of life we can have it. Notebook technology is one of the tools that community choose because of the characteristics who are always renewed by the marketers. Notebook are designed as a tool that is easy to carry anywhere, small and light to be placed on a individual lap when using it. Manufacturers often refer to laptop as “notebooks”, this is to avoid warm thigh complaints from customers and consequent opportunist liability suits (Wikipedia, 2007).

The use of laptops is very wide so that the whole world. The rapid growth in the technology sector is also effect increasing the number of competitors in the market. This cause-marketers and also academicians or practitioners focus on customer decision making in the purchase of a portable PC industry (Nasir, et al., 2006).

To satisfy the customer would be something quite challenging in the modern business world. What customers want and how they think are the questions often played in the minds of marketers or companies. Complex in users mind contribute to volatility in profits. When customers loyal to a brand or company, they indirectly help them expand market share, increase bottom line and sustain company’s advantage.

Brand shows a reputation of a company’s through their products or services. Brand is also a sign that memorable in the minds of customers. The American Marketing Association defines a brand as a name, term, sign, symbol or design, or a combination of prototype, intended to identify the goods or services of one seller or group of sellers, and to differentiate from bear fight them of the competitors (Kotler, et al., 2009). Brand can become the heart of marketing and business strategy. Success of the brand is able to generate profits by attracting new customers and retain existing customers.

With the brand, it is a sign of the signal in some level of quality which the buyer is satisfied with the easy to choose any of the products. Brand loyalty provides a forecast of demand for the company and may also explain the willingness of customers to pay for higher price. Although competitors are easy to duplicate the process and product design, they are not easy to match the description in the individual and the organization from year to year in any marketing and product development. Therefore, the brand became a very influential in the world competition.

ListenRead phoneticallyAccording to Malaysia Laptop (2008), top ten notebooks for October 2008 are:

  • Compaq Presario CQ40
  • Acer Extensa 4620Z
  • Acer Aspire One
  • Acer Aspire 2920Z
  • HP Pavilion dv5
  • HP Pavilion dv2700
  • Acer Aspire 4530
  • Apple MacBook
  • ASUS Eee PC 1000H
  • Dell Latitude E6500

In 1986, battery powered portable computers had just 2% worldwide market share. But today, notebooks are becoming increasingly popular, both for business and personal use (Economics, 2005). In 2008, it is estimated that 145.9 million notebooks were sold and in 2009 the number grow to 177.7 million. The third quarter of 2008 was the first time when notebook PC shipments exceeded desktops, with 38.6 million units versus 38.5 million units.

1.2 Problem Statement

Notebook were originally considered to be a small niche market and were thought suitable mostly for specialized field applications such as the military, accountants and sales representative. But today, notebooks are becoming more popular for student and general use. In addition, new products of notebook launches to the market, acquisitions and mergers in the sector, rapid developments in the nano technology, integrated wireless networking and decreased price make the customer are more influence to buy a notebook (Nasir et al., 2006) which at the same brand or may switch to other brand.

This study intended what are the factors that influence notebooks users to be loyal of the notebook brand.

1.3 Research Questions

  • Bases on the discussion earlier in the background of the problem, the research question developed will be:
  • Does price influence brand loyalty among notebook users?
  • Does brand name influence brand loyalty among notebook users?
  • Does promotion influence brand loyalty among notebook users?
  • Does features influence brand loyalty among notebook users?
  • Does satisfaction influence brand loyalty among notebook users?

1.4 Research Objective

The objectives of this research are:

  • To determine whether “Price” influence brand loyalty among notebook users.
  • To determine whether “Brand Name” influence brand loyalty among notebook users.
  • To determine whether “Promotion” influence brand loyalty among notebook users.
  • To determine whether “Features” influence brand loyalty among notebook users.
  • To determine whether “Satisfaction” influence brand loyalty among notebook users.

1.5 Significance of Study

In general, this study is to help marketers and consumers in order to develop more effective marketing strategies. This study also allows us to identify what is the real motivation that exists inside of every made of purchase and what is needed by the user. Therefore, more efficient marketing activities will be implemented.

Marketers also can predict the reaction shown by the user of their marketing strategies that has been implemented. And marketers can look whether the strategies that are practiced can maintain the customer that are loyal to their products and also can attract other customers to buy their products. This study is expected to provide useful information in marketing to attract the loyalty to the brand.

1.6 Scope of the Study

The study was conducted that involving notebook user. In this study, questionnaire will be formed and it will be complemented by the notebook user.

In addition, the collection of secondary sources is also used in this study. This includes the findings of several studies carried out by several previous researchers, journals, books and resources derived from electronic media such as the internet.

1.7 Limitations of the Study

Since this study includes some students at the Universiti Utara Malaysia (UUM), the results of this study is more relevant applied to the student in UUM. These findings did not reflect the entire population of notebook users in Malaysia as a whole, the factors influencing brand loyalty among notebook users.

This study was carried out in a relatively short period, time constraints also exist. If this study can be implemented in the longer term, the material or related information can be increased in further.

CHAPTER 2:

LITERATURE REVIEW

2.1 Introduction

This chapter review literatures in the context of this study. In this section, discussion will be based on the brand loyalty and factors that influence brand loyalty such as price, brand name, promotion, features and satisfaction among notebook users. Research framework and research hypothesis are also discussed in this chapter.

2.2 Brand Loyalty

Loyalty reflects the strength of the relationship between individual attitudes and repurchase. It contains a number of objectives in planning marketing strategies and describes the development of fundamental importance in maintaining a competitive advantage. For example, customers remain loyal to the brand of the same product, the suppliers or services providers in the long term and not easily changed. They also showed their loyalty to the brand by spread kindness to others.

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Brand loyalty is a commitment by consumer to repurchase or continue to using the current brand. It can be look by the repeated buying in a variety of market context such as product, service, and store. Loyalty is thought to be important for market practitioners for a number of reasons such as generating greater profits, brand extension and increase market share (Thiele & Mackay, 2001). Building brand loyalty requires investment in marketing programs that are target to the current and potential customer.

Consumers that are loyal only repurchase the same brand even there is an alternative brand in the market. Marketers often pay attention to identify the characteristics of brand loyal consumers and the degree of brand loyalty of consumers so that they can directly and effectively focus their marketing and promotional strategies on these consumers who share similar characteristics among the large population (Lau, et al., 2006).

Previous study shows that the brand loyalty is measured by behavioural and attitudinal loyalty. Typically, brand loyalty is defined with reference to either attitudinal or behavioural components (Bennett, et al., 2007)). Behavioural loyalty measures defined brand loyalty in terms of the actual purchase observed over a time period and attitudinal loyalty measures are based on stated preferences, commitment or purchase intention (Thiele & Mackay, 2001).

A variety of factors also have been found to impact the development of brand loyalty. Lau, et al., (2006) found that brand name, style and promotion are the key brand factors of customer loyalty. Others authors have reported that advertising, price and brand have a significant impact on brand loyalty (Othman & Ping, 2006). Sales encounter satisfaction, in turn, leads to brand loyalty by enhancing brand attitude and salesperson loyalty (Brexendorf, et al., 2009).

2.3 Factors of Brand Loyalty

2.3.1 Price

Price is one of the important factors that affect on brand loyalty. Consumers with high brand loyalty are willing to pay for a high price for their favourite brand, so their purchase intention is not easily affected by price. In addition, customers have a strong belief in the price and value of their favourite brands so much so that they would compare and evaluate prices with alternative brands (Sidek & Yee, 2008).

Dovaliene & Virvilaite (2008), state that price is one of the most flexible marketing mix elements that can be quickly changed, after changing specific product and service characteristics. People with higher incomes and higher product involvement willingly pay more for features, customer service, quality, added convenience and the brand name (Kotler, et al., 2009).

Price variations for consumers’ favourite brand may only affect their purchase quantity but not their brand choice decision. Consumer satisfaction can also be built by comparing price with perceived costs and value (Lau, et al., 2006). The results from the previous study show that price have a significant to influence on brand loyalty (Lau, et al., 2006; Sidek & Yee, 2008; Othman & Ping, 2006). Based on the above discussion, the first hypotheses should be as follows:

H1: There is significant and positive relationship between price and brand loyalty among notebook users.

2.3.2 Brand Name

The brand name is quite often used interchangeably within “brand”, although it is more correctly used to specifically denote written or spoken linguistic elements of any product. In this context a “brand name” constitutes a type of trademark, if the brand name exclusively identifies the brand owner as the commercial source of products or services.

Famous brand name can disseminate the benefit of product and lead to higher recall of an advertised benefit than a non-famous brand name (Kotler, et al., 2009). They are many unfamiliar brand names and alternatives available in the market place. Consumers may prefer to trust the major famous and popular brand name (Lau, et al., 2006). These prestigious brand names and their image attract consumers to purchase the brand, affect repeat purchasing behaviour and reduce price related switching behaviours.

Consumers are more sensitive to brand name and usually used it in buying decision. This lead to the second hypothesis:

H2: There is significant and positive relationship between brand name and brand loyalty among notebook users.

2.3.3 Promotion

Promotion is one of the four elements of marketing mix (product, price, promotion, distribution). It is the communication link between sellers and buyers for the purpose of influencing, informing, or persuading a potential buyer’s purchasing decision. Promotion includes the use of advertising, sales promotions, personal selling and publicity (Kotler, et al., 2009). Promotion is an important element of a firm’s marketing strategy.

Advertising induces brand loyalty in consumers who would otherwise purchase the cheapest alternative on the market. Firms first invest in advertising, and then compete in prices for the remaining brand indifferent consumers (Chioveanu, 2008). Sales promotions are typically viewed as temporary incentives that encourage the trial of a product or service (DelVecchio, et al., 2006).

Promotion was considered as one of the most important factors in determining a consumers’ brand loyalty (Sidek & Yee, 2008). Therefore, the third hypothesis is developed as follows:

H3: There is significant and positive relationship between promotion and brand loyalty among notebook users.

2.3.4 Features

Features are qualities or characteristics of the product or service. According to decision making model, consumers process the environmental cues; the physical factors of the product, psychosocial cues such, such as advertising, and consumers put these cues into a set of perceptions that shape their preferences (Hong & Lerch, 2002).

Based on these preferences, consumers make their choices subject to situational constraints, such as price and people evaluate various objective features when buying an IT product (Hong & Lerch, 2002). Nasir et al., (2006) find that features are a factor that influences consumers’ laptop purchase decision. Hence, the fourth hypothesis shall be as follows:

H4: There is significant and positive relationship between features and brand loyalty among notebook users.

2.3.5 Satisfaction

Satisfaction is a measure of how products and services supplied by a company meet or surpass customer expectation. The impact of satisfaction on loyalty has been the most popular subject of studies. (Ha, et al., 2009) state that power of satisfaction significantly lies in its ability to reinforce brand loyalty formation. Similarly, the satisfaction had a significant influence on loyalty (Kuusik & Varblane, 2009).

A minor change in satisfaction can lead to a substantial change in loyalty increment. Moreover, a small increase in customer satisfaction boosted customer loyalty dramatically (Bowen & Chen, 2001). The customers will feel satisfied when the goods are beyond their expectation and otherwise when their expectations are beyond the goods’ actual condition (Sheng & Liu, 2010). The discussion leads to the development of the fifth hypothesis:

H5: There is significant and positive relationship between satisfaction and brand loyalty among notebook users.

2.4 Theoretical Framework

The dependent variable in this study is brand loyalty. The independence variables are price, brand name, promotion, features and satisfaction.

CHAPTER 3:

METHODOLOGY

3.1 Introduction

The research methodology involved the administration of questionnaire on a sample of accounting students. This section outlines the operational definition, instrument and measurement of variables, data collection and sampling

3.2 Research Design

Aspects of the study include demographic factors like gender, race, education level, age, and notebook brands that respondent have (Part 1) while Part 2 is to assess the factors influencing brand loyalty among notebook users. The questions in part 2 are divided into six key dimensions of price, brand name, promotion, features, satisfaction and brand loyalty.

Unit of analysis in a study comprised of individuals, groups, organisations and societies. Unit of analysis is a key feature that will be analyzed in an investigation. Individuals selected as the unit of analysis in this study in which students from UUM, Sintok. It is to examine the factors that influence them to be loyalty to the notebook brand.

This study using a survey method whereby questionnaire form will be used because it is more beneficial than other methods of data collection such as interviews and observations. Questionnaire will be distributed to UUM’s students because most of the UUM students use notebook for their learning.

3.3 Operational Definition

Price – the degree to which the notebook users that price can influence them be loyalty to notebook brand.

Brand Name – the degree to which the notebook users that brand name can influence them be loyalty to notebook brand.

Promotion – the degree to which the notebook users that promotion can influence them be loyalty to notebook brand.

Features – the degree to which the notebook users that features can influence them be loyalty to notebook brand.

Satisfaction – the degree to which the notebook users that satisfaction can influence them be loyalty to notebook brand.

3.4 Instrument and Measurement of Variables

The questionnaire was divided into two parts. Part 1 of the questionnaire consists of demographic information such as gender, age, and education level. Part 2 contains questions on factors which influence brand loyalty such as price, brand name, promotion, features and satisfaction. It also contains a question on brand loyalty. The entire question in Part 2 using a five point Likert scale (1= strongly agree to 5 = strongly disagree).

3.5 Data Collection

Data collection is divided into primary and secondary data. Primary data is from original source. Secondary data is data collected by previous researchers. In this study, data secondary as journals, reference books and the Internet data collected to obtain an overview of the study. Secondary data also provide an initial overview for researchers and makes a deeper study.

Primary data is used to help answer research questions and test hypotheses based on studies objectives. So, to test this hypothesis, a questionnaire was chosen as the primary method of data collection. Beneficial uses of these questionnaires are:

  • Help researchers get the data easily.
  • Information in a simple questionnaire to be encoded.
  • Advantages to the scientific research on which measurements are valid and reliable.
  • Easily answered by the respondents.
  • Data can be obtained by mail, this means that research can be conducted even though the extent of geographical breadth.
  • More efficient when compared to the interview method.
  • Respondents answer truthfully honest answer without fear (Hair, et al., 2007).

3.6 Sampling

Hair, et al. (2007) defined a few procedures in the sampling process. The procedures are:

  • Defining the target population.
  • Choosing the sampling frame.
  • Selecting the sampling method.
  • Determining the sample size.
  • Implementing the sampling plan.

The population in this study consisted of all students of UUM with the number of 31, 251 students are PhD students from about 1,186 students, a total of 44 Graduate Diploma students, Graduate After Diploma total of 780 students, a total of 4,030 Postgraduate students and the Undergraduate student is about 25,211 students.

The sample in this study is the Undergraduate and Postgraduate students of UUM COB. Respondents were selected by convenience sampling in which samples are available to choose to participate in this study and may provide necessary information. Convenience sampling was chosen because of time constraints inherent in this study.

The population or the unit of analysis for this research will be the College of Business (COB) students in Universiti Utara Malaysia (UUM). These COB students of UUM were chosen because COB has a large number of students under them.

3.7 Data Collection Method

The questionnaire will distribute to COB students. Responses given by COB students in answering questionnaire is the most important resource in term of data collection. Findings of this study are one of the instruments that can measure the factors influencing brand loyalty among notebook users.

3.8 Method of Data Analysis

Some statistical analysis was used to analyze the data in this study. All data were analyzed using the statistical package for social science (SPSS) software version 12.0.

Descriptive analysis was used to see or understand the demographics of the respondents in this study. This method was also used to examine the dimensions of the study variables.

To test the reliability of each factor influencing brand loyalty, the Cronbach coefficient alpha is used. The size of the correlation coefficient is used to quantitatively describe the strength of the association between two or more variables.

The Pearson correlation was also used to measure the relationship between two variables. This analysis explains the positive or negative relationship between the two variables.

Multiple regression analysis was used to analyze the dependent variable and several independent variables. It determine the relative importance of others independent variable in predicting the dependent variable.

CHAPTER 4:

RESULTS AND ANALYSIS

4.1 Introduction

This chapter discusses the findings derived from data collected by the respondents who participated in this study. This chapter will also discuss the descriptive analysis for respondents demographic, the reliability of the factors and multiple regression analysis.

4.2 Respondents Demographic

This study has a total of 31 respondents. Respondents demographic were asked in Part A that is gender, race, education level, age and notebook brand. The summarizing of the result from this part is show in Table 4.2.1 below.

The table show that the ratio of both genders is 25.8% for male and 74.2% for female. So the percentages of female students are higher than male students. The results also show the race of the respondents where Malay consists of 17 students (54.8%), Chinese consists of 9 students (29.0%) and Indian consists of 5 students (16.1%).

In education level, the number of undergraduate students that involves in this study is 22 students (71.0%) and postgraduate are 9 students (29.0%). And in age distribution, Table 4.1.1 shows that the higher percentage was 74.2% for 24 years and below, 22.6% for 25-35 years and 3.2% for 45 years and above.

The result also show that most of the respondents use Compaq brand that consist of 9 students (29.0%) followed by Acer brand that consist of 8 students (25.8%). For HP brand consists of 5 students (16.1%), Dell brand consists of 3 students (9.7%), Toshiba and Lenovo brand consists of 2 students (6.5%) and last one is FTEC and Sony brand that only 1 students (3.2%).

Demographic Variables

Frequency

Percent (%)

Gender

Male

8

25.8

Female

23

74.2

100.0

Race

Malay

17

54.8

Chinese

9

29.0

Indian

5

16.1

100

Education Level

Undergraduate (degree)

22

71.0

Postgraduate (master)

9

29.0

100.0

Age

24 years and below

23

74.2

25-35 years

7

22.6

45 years and above

1

3.2

100

Notebook Brand

HP

5

16.1

Compaq

9

29.0

Dell

3

9.7

Acer

8

25.8

Sony

1

3.2

Toshiba

2

6.5

Lenovo

2

6.5

FTEC

1

3.2

100.0

4.3 Reliability Tests

In this study, the reliability test is used to measure the coefficient and consistency each variables. The internal consistency reliability showed by coefficient alpha, also referred to as Cronbach’s alpha. Hair et al., (2007) show the guidelines for the reliability as rules-of-thumb to interpret alpha values (Table 4.3.1).

Table 4.3.1 Roles of Thumb about Cronbach-Alpha Coefficient

Alpha Coefficient Range

Strength of Association

< 0.6

Poor

0.6 to < 0.7

Moderate

0.7 to < 0.8

Good

0.8 to < 0.9

Very good

> 0.9

Excellent

From the test, it was found that the Cronbach alpha for “price” factor is 0.567 from 4 variables item. For “brand name” factor, each of the 4 variables item to total correlation at moderate strength is 0.655 and for “promotion” factor the Cronbach alpha is at 0.635 from total correlation of 4 variables item. In “features” factor, each of the 4 variables item to total correlation was at moderate strength is 0.692. The Cronbach alpha for “satisfaction” factor is 0.909; total correlation of 5 variables item and for “brand loyalty”, the Cronbach alpha was 0.943 from 4 variables item. Table 4.3.2 illustrates the Cronbach alpha of the variables.

Table 4.3.2 Cronbach Alpha of Variables

Variable

Cronbach Alpha

Price

0.567

Brand Name

0.655

Promotion

0.635

Features

0.692

Satisfaction

0.909

Brand Loyalty

0.943

4.4 Hypotheses Testing

To test the hypotheses in chapter 2, the Pearson correlation was use. This Pearson correlation can measures the linear association between two metric variables. It was range from -1.00 to +1.00 and zero representing no association between the two metrics variables. -1.00 and +1.00 show the perfect correlation or association between the two metrics variables. The correlation can be positive or negative depending on the direction of the relationship between the variables (Hair et al., 2007).

4.4.1 First Hypotheses

H1: There is significant and positive relationship between price and brand loyalty among notebook users.

The result show that correlation between price and brand loyalty is -0.641 and the significance level is 0.000. It is found that price have a negative relationship with brand loyalty which the significance level is small (p < 0.01). This means the hypotheses is reject of there is significant and positive relationship between price and brand loyalty among notebook users.

If the notebook providers increase the value of the price, it influenced the notebook users not to stay or loyal to the same brand because the price is more expensive that before and price not the factor that influencing brand loyalty among notebook users.

Table 4.4.1 Correlation between Price and Brand Loyalty

Price

Loyalty

Price

Pearson Correlation

1

-.641(**)

Sig. (2-tailed)

.

.000

Loyalty

Pearson Correlation

-.641(**)

1

Sig. (2-tailed)

.000

.

** Correlation is significant at the 0.01 level (2-tailed).

4.4.2 Second Hypotheses

H2: There is significant and positive relationship between brand name and brand loyalty among notebook users.

The result show that correlation between brand name and brand loyalty is 0.538 and the significance level is 0.002. It is found that brand name have a positive relationship with brand loyalty which the significance level is small (p < 0.01). This means it is failed to reject the hypotheses of there is significant and positive relationship between brand name and brand loyalty among notebook users.

In other words, if the notebook providers more emphasizes on their notebook’s brand name it can increase the user’s loyalty to the brand because they believe that the brand is reputable, prestigious and attract them more to purchase from the same brand. So brand name can influenced brand loyalty among notebook users.

Table 4.4.2 Correlation between Brand Name and Brand Loyalty

Brand Name

Loyalty

Brand Name

Pearson Correlation

1

.538(**)

Sig. (2-tailed)

.

.002

Loyalty

Pearson Correlation

.538(**)

1

Sig. (2-tailed)

.002

.

** Correlation is significant at the 0.01 level (2-tailed).

4.4.3 Third Hypotheses

H3: There is significant and positive relationship between promotion and brand loyalty among notebook users.

The result show that correlation between promotion and brand loyalty is 0.422 and the significance level is 0.018. It is found that promotion have a positive relationship with brand loyalty which the significance level is small (p < 0.05). This means it is failed to reject the hypotheses of there is significant and positive relationship between promotion and brand loyalty among notebook users.

Promotion is need for all the marketers to introduce their product or services to the customer. So, if the notebook provider more emphasis on their promotion, the number of loyal customer to their brand more increases. It shows that promotion one of the factors that influencing brand loyalty among notebook users.

Table 4.4.3 Correlation between Promotion and Brand Loyalty

Promotion

Loyalty

Promotion

Pearson Correlation

1

.422(*)

Sig. (2-tailed)

.

.018

Loyalty

Pearson Correlation

.422(*)

1

Sig. (2-tailed)

.018

.

* Correlation is significant at the 0.05 level (2-tailed).

4.4.4 Fourth Hypotheses

H4: There is significant and positive relationship between features and brand loyalty among notebook users.

The result show that correlation between features and brand loyalty is 0.383 and the significance level is 0.033. It is found that features have a positive relationship with brand loyalty which the significance level is small (p < 0.05). This means it is failed to reject the hypotheses of there

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