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Rolex Advertising and Brand Management Analysis

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Table of Contents

  • Section 1
    • Brand
    • Background Information about Rolex
    • Brand Architecture
  • Section 2
    • Brand Positioning
    • Importance of Brand Positioning 
    • Brand Positioning of Rolex
    • Comparison of Brand Positioning of Rolex with Citizen 
  • Section 3
    • Brand Analysis
    • Product Life Cycle Analysis
    • Product Life Cycle (PLC) Strategy of Rolex 
    • Brand Equity
    • Brand Value of Rolex
    • Brand Identity
    • Brand Identity of Rolex 
    • Brand Pyramid
    • Brand Pyramid of Rolex 
    • Brand Image
    • Rolex’s Brand Image and Brand Personality
  • Section 4
    • Advertising
    • Advertising Strategy of Rolex
  • Section 5
    • Brand Management Recommendation
  • References

Section 1

Brand

Brand is referred to a perception that is overtly demarcated from other services or concept in order to be efficiently marketed and to gain a competitive benefit over the other rival firms. A précised definition of brand can be stated as “…a set of mental associations, held by the consumers, which add to the perceived value of a product or service” (Kapferer, 2008, pp. 10). The alliance ought to be exceptional, well distinctive, effective and affirmative.

Brands serve as a main feature in order to separate their goods or services from those of their rivals. For the organisation, it builds a distinct individuality in support of it from others. Brand is regarded as an organization’s commodity as it enhances the product’s appeal with the aid of its excellent salient features. As it does not have the attribute of being figured, a brand is subjective in design. It is also very distinct from simply being a good, or a facility, or a commodity. It improves the corporate picture. It is also therefore distinguished from a business. It has been found that, on the basis of the market identity that is synonymous with it, customers review a good or service. Branding tends to establish an elongated, vigorous and sentimental brand-company affiliation. It discloses the business and other important details to the company globally with regards to the company. In itself, the brand name influences the customer to purchase the commodity. Branding allows an organisation to specifically identify any commodity, place the product and sell it to the prospective consumer (Kapferer, 2008).

Rolex Advertising and Brand Management Analysis

Background Information About Rolex

Rolex, the exquisite brand coined by Hans Wilsdorf and produced by Swiss watch making company at Bennie, brought forward a wonderful range of watches. Since ages, Rolex prolongs to sustain efficiently and also persists to be a strong position in the copious watch market. Rolex is assisting its company with an enlarged market share and a significant competitive advantage to sustain in the fiercely competitive global industry. It enhances its market position which is a factor that makes the brand an asset for the enterprise which segregates it from merely being a product, service or commodity. Rolex focuses on brand purity, trend, business presentation and constancy. These are the most important reasons that have made Rolex an astounding brand (Liebeskind, 2004).

It has been seen that customers always evaluate and scrutinises a particular product on the basis of brand name. Similarly, Rolex having a superior brand name stimulates customers to spend on its product, although it has encountered various competitors as a consequence of globalisation, still it stands to be an internationally exclusive brand. The main competitors of Rolex include Citizen and Omega. The watches endowed by Rolex primarily focus on the sports person as their potential target customers as it deals with giving immense importance to luxury and deluxe products. It has also developed its brand on classic, fashionable and water resistant watches. The international players dealing with the similar nature of products and similar market segment may be regarded as their competitors. It follows the scheme of premium pricing to distinguish its product from its contenders (Rolexshow, 2011)

Brand Architecture

Brand architecture implies to the internal restructuring of the brand, in this context by Rolex falls under the category of umbrella brand strategy where each store of the enterprise envelops several product categories. It can achieve a competitive advantage over its competitors following the Umbrella brand structure (Komonosky & Et. Al., 2005).

Rolex Advertising and Brand Management Analysis

Source: (Komonosky & Et. Al., 2005).

Section 2

Brand Positioning

Positioning begins with the company analysing and mapping the psychological insight of the consumers regarding the product. Positioning entails the situation where the prospect buyer would buy the product of the company instead of purchasing from other firms dealing with similar product. Brand positioning is a principal move towards branding. Product positioning implies to the intent of the brands in comparison to other brands. It characterises the physical as well as the functional features with regard to the product. The professed picture of the product is the chattels of the consumer’s intellectual state or insight. Hereby, the advertisers should focus on actually coming up with the product that the consumers actually perceive to receive. Brand positioning should also ensure that its product is divergent when compared to its competitors. It may be regarded as the apparent base in favour of improving and enhancing the awareness and verdict of the consumer regarding every aspect of the product (Sengupta, 2005).

Importance of Brand Positioning

Brand positioning concentrates essentially on the level of satisfaction derived on part of the consumers about the product in the utmost convincing way (Sengupta, 2005).

Brand positioning helps in the identification of the unidentified consumer needs which may help the company to attain competitive advantage over the other entrants or companies dealing with the similar nature of the product (Sengupta, 2005).

It implies to rebranding the product in the most unique and exclusive way which makes it differentiable from the other products that are available in the market of similar nature (Sengupta, 2005).

The real strengths with regard to the brand may be precisely measured by the organisation. It depicts a true and clear picture of how the organisation is functioning in the present scenario and how it will perform in future. It endeavours to make the brand attain the pinnacle most position and sustain vigorously in the long run (Sengupta, 2005).

Brand positioning also helps the organisation to make specific judgements keeping in mind the customers’ standpoint and their expectations from the products available, also the enlarged level of competitor’s policies (Sengupta, 2005).

In the process of considering brand positioning, the competitive market scenario can be well analysed as well as examined, also whether the function of the organisation is to the liking of the consumers, if certain unidentified needs of the consumers creep in, such cases can be looked upon by brand positioning (Sengupta, 2005).

Brand Positioning of Rolex

In order to ascertain an exquisite brand image, Rolex uses moderate production cost and the expenses in relation to the promotional activities whereas in return to which it attracts a large number of customers which inflates its sales volume. Rolex mainly focuses on standardised and quality products. This may help Rolex to be the most leading and well-known profit generating watch in the global market. This brand usually favours to make use of certain modish and trendy persons or singers for the purpose of promoting the brand through advertisement media. Rolex seeks to choose explicit advertising media in order to promote its products which aid in the formation of the brand image, at the same time manage the cost incurred in advertisement in judicious most ways. It elegantly achieves multifarious benefits spending a minimal quantity of funds which facilitate to maintain the equilibrium between profit and incurred cost. Through their outstanding marketing strategy, Rolex is on the verge of fruitfully escalating its fans and also earning the admiration as well as loyalty from its customers (Fairy, 2010).

Comparison of Brand Positioning of Rolex with Citizen

Citizen Watches can be regarded as one of the major competitors of Rolex. The company overhauled its watch brand from Citizen Watches to Citizen Eco-Drive with intent to compose it significantly and in a pertinent way to act in response to the altering sphere of time. It has undergone an expansion of its business unit all over the world and has got recognition in the global market. Citizen is sturdily working to fortify its branding scheme by a widespread advertising campaign. It has selected airport as a global media for promoting the array of its products to get in touch with its targeted customers. In recent era, Citizen has emerged as a leader in the eco-friendly watches and it also has incredible set of ‘light-powered watches’. They deliver to their target customers of the ladies segment with stylish and trendy set of wristwatches as their flagship product (Wardandsibley, 2010).

Rolex when compared to Citizen; usually is likely to make use of certain stylish and trendy personalities or vocalists for promoting the brand through advertisement media in the most cost effective way. It also pleasingly realises diversified things with a minimum expenditure which furthermore facilitate to uphold the stability between profit and incurred cost (Fairy, 2010).

Rolex Advertising and Brand Management Analysis 

Section 3

Brand Analysis

A brand analysis consists of analysis of the perceptions of customers towards the brand. In brand analysis, several features of brand are analysed, for example: brand performance, portfolio interrelationships, the strengths as well as weaknesses of brand and brand values.

To analyse the brand, it is important to track the performance of that brand’s product. In order to track the performance, management requires developing the objectives of products and a standard of performance. The product objective can be monetary objective or non-monetary objective. It is essential to arrange the sales and expenses characteristics of each product by which a company can realise how the brand is performing in the market. The performance of product in any particular brand can be analysed by several methods. 

Product Life Cycle Analysis

The Product Life Cycle (PLC) Method Consists of:

  • Deciding the duration of product life cycle of any product of the brand
  • Recognising the current product life cycle phase of that particular product
  • Developing a product strategy which matches to that particular phase
  • To foresee threats and search opportunities for shifting and expanding the product life cycle of the product

For many products, the life cycles have become shorter due to continuous development of new technology, rapid changes of customers’ fashion and strong competition in the market. The PLC differs from product to product. Thus, in order to develop branding strategy it is important to find out the velocity of changes of customers’ preferences towards the brand. As soon as, a new technology arrives a product’s life cycle generally finishes. Thus, there are different strategies in different phases of PLC. There is a need to change the emphasis on branding strategy in different life cycles. It is vital to analyse the development rate, sales tendency, concentration of competition, pricing strategies for appropriate PLC analysis. The most difficult portion of PLC analysis is to judge when the product had shifted from growth to mature phase as this is the vital phase of any product and strategy should be made carefully in these phases (Cravens & Piercy, 2009).

Product Life Cycle (PLC) Strategy of Rolex

From the introduction phase, Rolex had applied unique branding strategies than the other competitors. The product of Rolex brand is on growth phase. This phase is characterised by modification of product, development of distribution network and advertisement so as to expand the product. Thus, Rolex had modified its products from time to time. It had continuously developed the watches, such as, in 1931 Rolex had first developed ‘water resistant’ watches, in the year 1956 Rolex had developed its products and introduced ‘automatic date and day change’ model. To maintain its image and sustain in the market, Rolex started creating watches with rich metals including gold, diamond and gems. In order to expand its distribution network, Rolex had spread its market globally. Rolex watches are available in chief economies internationally. As of now, the product is in the middle of growth phase, it is important to change strategy to advertise the product by proper brand management. Meanwhile, Rolex had developed advertising campaigns through celebrities. One of the brand ambassadors of Rolex is Brad Pitt, a renowned American actor. Thus, it can be seen that Rolex had analysed its brand performance properly and taken appropriate strategies in the PLC phase of its product to sustain in the market (Liebeskind, 2004). 

Product Life Cycle (PLC) Strategy of Rolex

Source: (Liebeskind, 2004).

Brand Equity

Evaluating brand equity is another vital component of brand analysis. In order to analyse a brand it is important to recognise the brand equity because it reveals the brand performance. The brand equity consists of:

  • Loyalty towards the brand
  • Perceived quality
  • Brand leadership in market
  • Market performance
  • Brand differentiation

The above factors offer the basis for evaluating brand equity. It is vital to judge complete brand value and alteration in brand value over time (Cravens & Piercy, 2009).

Brand Value of Rolex

Rolex is counted as one of the best luxurious brands in the world. According to ‘Best Global Brand’ of ‘Interbrand’ Rolex had positioned itself as one of the top 100 brands with regard to brand value. In the year 2007, the brand value of Rolex was almost 4589 USD which was 8% more than 2006. In 2008, the brand value of Rolex became 4956 USD. This was the impact of high brand loyalty among Rolex customers. Rolex had successfully developed durable relationship with their customers. It concentrates on the good business performance and permanence of its superior services. Rolex had showed great value towards its products. It provides good after sales services which help Rolex to differentiate the brand from other competitors. In the year 2009, the brand value of Rolex had reduced by 7% to 4609 million USD. However, this does not mean that its loyalty, or brand leadership or brand differentiation had decreased. The change had occurred mainly due to lesser demand in the luxurious watches. The economic recession had made the decline in sales of luxurious watches, because products of Rolex are much costlier. The Rolex brand is known as luxurious brand, thus cutting the prices of product can decrease the brand reliability. Rolex continuously invested in brand advertisement by sponsoring celebrities. Rolex sticks to its branding strategy and it does not consider the temporary losses rather it focuses on long-term stability with balanced improvement.

Year Rank Brand Value (million USD) Change than Previous Year
2007 71 4589 8%
2008 71 4956
2009 68 4609 -7%

Source: (Interbrand, 2007) & (Interbrand, 2008) & (Interbrand, 2009).

Brand Identity

Brand identity is another important aspect of brand equity. It offers a basis for brand equity. Brand identity is a fundamental set of brand relationship to manage a brand. There are several methods for any company to apply for brand identity.

Brand Identity

Source: (Cravens & Piercy, 2009)

  1. Definite Product Branding: In this strategy, a company allocates the brand name with a definite product. Brand name on that definite product can provide an exceptional recognition of that product in the market.
  2. Product Line: This strategy is beneficial where a company deals with several products. This strategy provides cost leadership by sponsoring the brand name to the whole product line than a distinct product.
  3. Corporate Branding: In this strategy, a company develops brand identity by applying the corporate name to the complete product submission. The major disadvantage in this strategy is that problem in one particular product can generate negative image to the whole product.
  4. Group Branding: This is another form of branding where a company utilises both types of branding, product line as well as corporate branding strategy.
  5. Private Branding: This is the other strategy for branding where a company deals with manufacturer to produce and position the brand name on the products sold by retailer (Cravens & Piercy, 2009).

Brand Identity of Rolex

Rolex follows the private branding strategy where its products are manufactured and sold by retailers under Rolex’s brand name. Rolex had authorised merchants in the various parts of the world where it sold its products. The retailers who sell the Rolex watches can construct brand loyalty because the brand is associated with retailer store.

Brand Pyramid

Brand Pyramid helps to understand the characteristics of brand. A brand pyramid reveals straightforward approach that creates the input which is used to express the brand’s promises. In any brand pyramid there are five levels which are:

  1. Brand Feature: Brand Feature is the characteristics or benefits of a product which are provided to the customer. It is the indication that a brand is keeping its promises. With regard to Rolex, its products are luxurious, durable and pure what it promises to provide.
  2. Functional Benefit: Functional benefit is the action that a company can do for the sake of the customer satisfaction. Rolex watches provide all functional benefits according the expectations of customers.
  3. Emotional Reward: Emotional reward in this sense is the way that a brand develops customer satisfaction by delivering the functional advantages. Rolex brand generates a feeling of self rewarding, sense of achievement and high communal position.
  4. Customer Value: The customer value of brand pyramid depicts the target customer of the brand with regard to attitudes, trusts, beliefs, awareness and lifestyles. The watches of Rolex is developed and priced in such a way that only rich people find it suitable for wearing Rolex products.
  5. Brand Personality: It symbolises the personality traits related with the worth of the brand. Through brand personality, a customer can represent a conclusion about the worthiness of brand which can support the customer’s personality. In case of Rolex brand, it had developed the brand to an extent that people provide significant importance about Rolex brand (Light & Kiddon, 2009).

Brand Pyramid of Rolex

Brand Pyramid of Rolex

Source: (Light & Kiddon, 2009).

Brand Image

Luxurious companies use celebrities to add a charm of the brand in the congested market. There are several theories of enhancing brand image towards customers.

Source: (Tellis, 2004).

Source Credibility Theory: According to Source Credibility Theory, recognition of any message of a brand depends on handiness and reliability. The handiness in this sense is the observed enthusiasm of the basis to make effective statements. Acceptance of the customers increases with the dexterity of the source as well as the ability of the customers to assess the brand (Tellis, 2004).

Source Attractiveness Theory: Source Attractiveness Theory focuses on the social sensibility of human. In this theory, the message about any brand is accepted by two modes, one is ‘Identification’ and other one is ‘Conditioning’. According to this theory the recognition of any message depends on acquaintance, likeability and resemblance (Tellis, 2004).

Meaning Transfer Theory: According to the ‘Meaning Transfer Theory’, celebrities can transform their unique sense for recommending a brand. This transformation can be done in three phases:

  1. Encoding Sense: Each celebrity has unique sense which can be enumerated by race, character, lifestyle, age and prosperity. With their unique sense they can convert a message in their own image.
  2. Sense Transfer: In this phase, those senses are converted to the brand image.
  3. Sense Detention: According to this theory, people buy any product not only for functional benefit but also for social and emblematic value. People choose the brand that a celebrity had recommended because they think it has certain desired meanings and senses (Tellis, 2004).

Rolex’s Brand Image and Brand Personality

Rolex is a developer of celebrity endorsement. Rolex follows the ‘Source Attractiveness Theory’ to enhance its brand image. Majority of endorsers of Rolex are related to sports. Rolex wants personality who are lively, luxurious, have high status, individuality and attitude. In the year 1927, Rolex had endorsed Mercedes Gleitze for branding. Rolex had always selected the best celebrities to symbolise the brand. For instance a few of the celebrities are golf player Arnold Palmer, opera vocalist Placido Domingo, and tennis player Caroline Wozniacki. Rolex chooses these people because it wants legendary and recognised personalities for its brand. The use of celebrity is to make a long-term image of the brand and it targets straight to the deluxe customer. Rolex does not use celebrities which are artist or superstar instead it selects those celebrities which have justifiable appeal. The celebrities of Rolex are eminent only in ‘niche’ accomplishments such as tennis, golf among others. The reason is that Rolex itself is known as ‘niche’ performer in view of cost and quality (Gautschi, 2005) & (Pedraza, 2008).

Section 4

Advertising

Advertising is a primitive as well as traditional phenomenon and has been implemented as the ways to communicate the needs related to the purchasing and selling of the goods. Every individual in today’s modernised era is to a large extent inclined by advertisement. Advertisement depicts the economic succession that has taken place in a rapid rate in today’s modern and technologically advanced and industrialised world. The affluence of a country is looked upon to the degree to which advertisement is used. Advertisement is an interesting and enthralling topic. There is always a recognised sponsor as well as a well a recognised medium and message following every advertisement. Through appropriate advertisement the purpose of the advertiser or sponsor is to encompass the idea or his proposal regarding the product amongst the target customers. The key and guiding intent of the advertiser is to make his product popular and unique for the customer. It is an influential instrument for communication principally targeted toward an explicit set of customers which carries copious information’s regarding the product or idea with a motive of persuading the customers to procure the product fulfilling the object of the organisation in a proficient approach (Kumar & Mittal, 2002).

There are numerous advertising objectives, such as it facilitates the introduction of an innovative product. It also helps to augment the degree of sales. It plays a critical role in educating the customers by eradicating the erroneous preconceived notions in the mind of the customer concerning the product and also assists in building the goodwill of the organisation. It also serves to retain its existing clients by communicating with them in a proficient way (Kumar & Mittal, 2002).

There are several advantages allied with advertisement such as through an advertisement media a producer can readily, without any obstacle, converse to a huge number of prospect customers and educate them about the product that is to be launched in the market. Through advertisement, customers can get meticulous information about every single aspect of the product which contributes to consumer awareness. It contributes to the economic advancement of the nation due to market expansion. Through advertisement association between the customers and producers strengthens up, building a long-lasting relation (Kumar & Mittal, 2002).

There are also certain drawbacks in context to the advertisement. Because of advertisement the cost of the product inflates which is further on borne by the customers. It often generates monopoly in the market which is an outcome of the cut-throat competition in the vicious market. Many a times it has been noted that advertisement provides superfluous and forged information regarding the product to be marketed and thus misleads the customers. Certain advertisements also create negative impact on the minds of the customers containing inappropriate contents (Kumar & Mittal, 2002).

Advertising Strategy of Rolex

Being a market leader, Rolex emphasizes on various advertising strategies. It has its own website in the web. It chiefly focuses on magazine and internet advertising. Every minute detail of the product with specifications is entailed in the magazines to make the prospect customers apparent about the product featuring its vivid range of sophistication embraced in it to create awareness about the availability in the market. It also engages celebrities to endorse its products through advertising the product in the television. It has various leading brand ambassadors. A few of the famous personalities who have endorsed Rolex are Roger Federer, Justin Henin and Andy Roddick among the sports personalities. Rolex has also made use of famous celebrities from the movies such as Pierce Brosnan. The Rolex brand of watches named Submariner model had emerged in James Bond movies (Hinzie Media Inc, 2011).

Rolex is benefiting from these advertisement strategies as the sales volume is increasing, customers are becoming aware about its brand. Rolex may deem to create an exclusive online store. The sponsors of Rolex are the elite sportsmen, explorers and artists; this moreover helps in building the brand name. Rolex also follows the approach of premium pricing i.e. a strategy used when the product sold in the market is highly unique and significant but the establishment devices to sell just a diminutive quantity of it. Premium pricing strategy is generally used with the products that are deluxe and luxurious (Keller, 2008).

Section 5

Brand Management Recommendation

Rolex’s brand management has made itself a valuable brand all over the world. Through its brand management, Rolex had generated a brand image for itself. However, Rolex’s brand management has its own drawbacks. Rolex has now reached in a certain stage that it has become convicted to its own branding strategy. It is now difficult for Rolex to change its brand strategy as it can change the brand image of Rolex and its commitment towards the world. It can make the customers mystified about the brand. To enhance the brand image, Rolex can introduce ‘Master Card’ for their valuable customers, a card that can provide numerous benefits. It can provide a unique sense of loyalty towards Rolex brand. Rolex can enhance the brand image by spreading the brand because globalisation had increased competition and there is many other luxurious watches brand in the market which can impact on Rolex’s sales. Rolex can host fashion shows which can increase the public relation. Through fashion shows, Rolex can influence people’s acquaintance and sense about the brand, its offerings and can successfully generate a unique personality and image in the mind of customer.

From the above analysis about brand management of Rolex, it is apparent that there is much difference in the branding between luxurious brands such as Rolex and other brands. Luxurious brands do not pursue the conventional branding approach. In order to maintain its status in the market, Rolex needs to maintain a strong brand personality, high integrity and a positive association with the customers. Brand is the main asset of Rolex which must be managed cautiously and every strategy regarding brand must be long-term in nature. In this way, Rolex can remain successful and aggressive in the luxurious brand market.        

References
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