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Customer Repurchase Intention Towards Batik Kelantan Marketing Essay

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Published: Mon, 5 Dec 2016

CHAPTER 1

INTRODUCTION

This first chapter will give an overview of the research which is the researcher conducted. This chapter also discussed and explains the background of the study, problem statement, research objective, research question, theoretical framework, hypothesis, significance of the study, and the limitations of the study in doing this project paper. In addition, to give better understanding to the readers with this research paper, scope of the study and definition of terms are also being included in this chapter

Batik is a traditional handicraft that has been in existence for thousands of years. Malaysia is fully committed to promoting Batik through non-governmental organizations as well as government-sponsored programs and agencies such as Kraftangan. The common goal is simply to make Malaysia a Batik capital. Batik is part of our lifestyle. We wear them frequently to show the identity of our community. The growth in the batik market shows that it is now at a level that we can be proud of and the growth has been rapid.

Thus, this study is aimed to identify whether the customer prior experience and product market variables influence on their repurchase intention towards Batik Kelantan. This study provides a better understanding of customer repurchase intention towards Batik Kelantan. Customer repurchase intention is important to ensure that they are really satisfied with the product and will by the product again in the future. This research can help the batik manufacturer in order to identify the factor of repurchase intention towards batik in order to gain their loyalty customer.

BACKGROUND OF STUDY

Batik refers to the process of wax-resist painting and dye painting to produce a multi-coloured intricate design. The word “batik” is believed to be related to the Malay word “titik” which means “point”, “dot” or “drop”. The origins of batik in Malaysia are obscure. However, the states of Kelantan and Terengganu are recognised as the cradle where batik grew in Malaysia.

Figure 1.0

By the 1990s batik had lost its magic. It was only in 2003 when it began to bounce back with renewed vitality. The untiring efforts of Datin Paduka Seri Endon Mahmood, wife of the Former Prime Minister, Dato’ Seri Abdullah Ahmad Badawi, gave batik back its dignity and its national status. She championed the craft by encouraging young designers to use their creativity to explore new ways of using batik. The Piala Seri Endon is now a coveted trophy for designers to showcase their ability to take batik to new heights of excellence.

Batik today has evolved into a unique art form that has inspired people all over the world. Batik is a versatile art form that lends itself to any kind of creative expression. Today, we can see batik as paintings or used on lampshades, footwear, picture frames, bed-sheets and other items of lifestyle design. (http://www.worldbatikcouncil.com)

This research intends to study about the influence of prior experience and product marketing variable on repurchase intention towards Batik Kelantan. This research is important towards Batik manufacturer in order to ensure that they know what are the factors that influences customer to make repurchase towards batik products.

PROBLEM STATEMENT

Today, the batik industry has responded by introducing more creative designs and motifs. Short-sleeve batik shirts, long dismissed as too casual, are now in vogue even for office attire. Every Thursday is supposed to be batik day for civil servants, but many civil servants not adhering to this guideline, particularly senior officials. By doing this research, we can overcome this problem through identifying the factors that make people repurchase and use the batik.

The growth in the batik industry which recorded sales of RM89 million last year compared with RM47 million in 2004 proves that the industry is expanding and being accepted within and outside the country, said Information Communication and Culture Minister Datuk Seri Dr Rais Yatim (www.malasiasme.com.my). By doing this research, batik manufacturer can identify what the factors that influence people to repurchase batik to ensure that our batik industry maintain the sales growth and keep being acceptance within and outside the country.

Figure 1.1

According to the SME Corp Malaysia Official Website (Utusan Malaysia on the 28th of October 2009), weaving and local batik industry has a bright future when he gave a return of RM73 million for the domestic market within nine months of this year. Director of the Malaysian Handicraft Entrepreneurs, Lop Mokhtar Abdullah said according to statistics Craft Industry Study 2007, reaching sales of batik cloth while sales of RM58.9 million to RM10.9 million. Thru this research, this country enable to achieve targeted sales for local batik industry through providing batik that can make people to repurchase the batik products.

According to Hj Nordin Bin Mahmood (the owner of Nordin Batik and Craft Sdn Bhd) said that today, government agencies, state enterprises and an increasing number of private companies, make ‘batik day’ or ‘casual wear’ day. He said that sometimes it challenges to keep their customer to repurchase their batik regarding to strong competition from other batik manufacturer in Kelantan such as Razali Batik as their close competitor. This study can help batik manufacturer to identify the factors that influence customer repurchase intention towards batik in order to increase their sales and build their own strategy to capture customer interest and at the same time can increase the usage of batik among people in this country.

RESEARCH OBJECTIVES

For this research, some objective have been identified and at the end of the process hoping it to determined. These objectives are actually important for the researcher to ensure that this research was on the right track. The objectives of this research are:

To relate the influence of customer prior experience on repurchase intention towards Batik Kelantan.

To relate the influence of product marketing variable on repurchase intention towards Batik Kelantan.

To study the most influencing factors on repurchase intention among customer towards Batik Kelantan.

To give batik manufacturer in Kelantan suggestions and recommendations on how to increase customer repurchase intention towards Batik Kelantan.

RESEARCH QUESTIONS

In studying the factors that influence customer repurchase intention towards Batik Kelantan, the researcher has designed the research questions.

The main research questions are:

Does the prior experience influence customer repurchase intention towards Batik Kelantan?

Does the customer perceived value influence customer repurchase intention towards Batik Kelantan?

Does the customer perceived quality influence customer repurchase intention towards Batik Kelantan?

THEORETICAL FRAMEWORK

INDEPENDENT VARIABLES

DEPENDENT VARIABLE

PRIOR EXPERIENCE

CUSTOMER REPURCHASE INTENTION TOWARDS BATIK KELANTAN

PERCEIVED VALUE

PERCEIVED QUALITY

Figure 1.2: Theoretical framework

The figure 1.0 shows the theoretical framework of this study. There are three possible independent variables identified by the researcher. The first independent variable is the prior experience; the second variable is the perceived value and lastly is the perceived quality. The idea is to identify whether these three independent variable are capable in creating a customer repurchase intention towards Batik Kelantan, the dependent variable.

HYPOTHESIS

Prior experience variable:

Ho: There is no relationship between the prior experience and customers repurchase intention towards Batik Kelantan.

H1: There is relationship between the prior experience and customers repurchase intention towards Batik Kelantan.

Perceived value variable:

Ho: There is no relationship between the perceived value and customers repurchase intention towards Batik Kelantan.

H1: There is relationship between the perceived value and customers repurchase intention towards Batik Kelantan.

Perceived quality variable:

Ho: There is no relationship between the perceived quality and customers repurchase intention towards Batik Kelantan.

H1: There is relationship between the perceived quality and customers repurchase intention towards Batik Kelantan.

SIGNIFICANCE OF STUDY

The significance of the study is the parties will gain the advantage after the research was conducted. For this research, three parties are involved. The parties are:

The researcher

By conducting this research, the researcher has the opportunity to understand the factors that make a customer to repurchase batik products. The valuable knowledge gained during conducting this research is vital for the researchers to use when they enter the working world.

The batik manufacturer

The study is also important to local batik manufacturer in Kelantan. The findings of research will benefited for the batik manufacturer in determining the factors that influenced customer repurchase intention towards Batik Kelantan. When the study is done, the batik manufacturer will learned how to increase the sales of their batik products by designing a strategy that can attract the customer’s intention to repurchase the batik.

The customer

This is the good chance for the customers to express their feelings and perception about Batik Kelantan. Thru this research, customer can express their feelings honesty. Besides that, their information can help batik manufacturer to improve their business to ensure that customer are interested to repurchase batik in the future.

DEFINITION OF TERMS

The definition of terms is the part of the report the researcher provides a further understanding to words or terms used in this reports. The definition is provided for the reader to gain more understanding regarding terms used in this reports.

Batik.

Batik refers to the process of wax-resist painting and dye painting to produce a multi-coloured intricate design. The word “batik” is believed to be related to the Malay word “titik” which means “point”, “dot” or “drop”. (http://www.worldbatikcouncil.com)

Repurchase intention.

The individual’s judgements about buying again a designated service from the same company, taking into account his or her current situation and likely circumstances. ( Hellier, Geursen, Carr and Rickard, 2003)

Prior experience.

Emotional aspects of experiences reflect the subjective elements of the product/service (Addis and Holbrook, 2001). With services that are more experiential in nature, attaining emotional goals (Bagozzi, 1997; Huang, 2001) and the state of these emotions, influences consumption and evaluation and has been suggested as the most crucial element of determining customer perceived value in experiential services (Addis and Holbrook, 2001). (Margee Hume and Gillian Sullivan Mort, 2010)

Perceived quality.

Consumer’s opinion of a product’s (or a brand’s) ability to fulfill his or her expectations. It may have little or nothing to do with the actual excellence of the product, and is based on the firm’s (or brand’s) current public image (see corporate image), consumer’s experience with the firm’s other products, and the influence of the opinion leaders, consumer’s peer group, and others.(http://www.businessdictionary.com/definition/perceived-quality.html)

Perceived value

The customer’s overall appraisal of the net worth of the service, based on the customer’s assessment of what is received (benefits provided by the service), and what is given (costs or sacrifice in acquiring and utilizing the service). (Phillip K. Hellier, Gus M. Geursen, Rodney A. Carr and John A Rickard, 2003)

LIMITATION

Financial constraint

The researcher has to conduct the research with own budget and as students, the researchers have a very limited budget. A lot of cost was involved in the data gathering processes such as the transportation, stationeries, printing and others.

Lack of experience

Lack of experience in carrying out the research has made this research difficult to the researcher especially in terms of collecting all the information needed.

Respondents’ cooperativeness

The researcher faces difficulties in dealing with the respondents. They do not give full cooperation during the distribution of

questionnaires. They thought that it is a waste of time and refuse to spend time answering the questionnaires. The researcher needs to approach them politely and personally and explain to them the valuable purpose of doing this research and their co-operation is vital and most appreciated.

Time constraint

The researchers need appropriate time to gather the information for the study because time is an important factor to produce a quality research. But then, the time given to complete this research is limited to a few months only. Thus, it will be hard for the researchers to produce an excellent work within a limited time

Validity of the information obtained

The researcher cannot guarantee to the level of information validity since the study is based on the questionnaires. It depends on the trustworthiness and credibility of the respondents as the results of the study is derived from their answers. The answers given by them might not be as accurate as the real data obtained.

SCOPE OF STUDY

In this research, the researcher analyzes and clarifies the factors that may contribute to customer repurchase intention towards Batik Kelantan. 100 respondents were selected for this research. The geographical scope of the study in this research covered Kelantan.

These research findings are beneficial to the batik manufacturer in Kelantan in increasing the number of customer that repurchase their product as well as increasing their profit in future. This study focuses on customer prior experience, perceived value and perceived quality as the factors influencing customers repurchase intention towards Batik Kelantan.

CHAPTER 2

LITERATURE REVIEW

INTRODUCTION

In this section, the literature review and opinion from other authors related to the topic are presented. The aims are to generate awareness, understanding, and interest for this study.

REPURCHASE INTENTION

In research by Doina Olaru, Sharon Purchase and Nathan Peterson (2008), they stated that Customers’ repurchase intent depends on the value obtained in their previous transactions (Wathne et al., 2001; Kaynak, 2003; Bolton et al., 2000) such as: appropriate performance criteria (benefits), competition, and cost considerations (Kumar, 2002). Future purchase intentions also have a relationship with customer satisfaction (Patterson et al., 1997; Durvasula et al., 2004). Overall, customers evaluate future purchase intentions based on the value obtained from previous episodes/contacts, with relationship benefits being a proxy for expectations of future benefits.

Besides that, the decision by customers to re-purchase from the same service provider depends on their past experiences (Wathne et al., 2001); their perceptions of value from previous service encounters (Bolton et al.,

2000); and expectations of the future business relationship. Improvements in benefits will result in more satisfied customers with greater loyalty and an enhanced competitive position (Kaynak, 2003).

Review of literature by Hong-Youl Ha, Swinder Janda and Siva K. Muthaly (2010), repurchase intentions represent the customer’s self-reported likelihood of engaging in further repurchase behavior (Seiders et al., 2005). For example, if a consumer experiences good feelings at lesser-known web sites, the consumer will be willing to revisit these web sites. More specifically, the more consumers positively experience, the higher their expectations are adjusted. This is consistent with previous research showing that customer expectations for higher satisfaction adjust based on experience over time. Programs that exceed a customer’s expectations can heighten repurchase expectations. Such a satisfaction leads customers to engage in repurchase intentions.

Oliver (1980) and Oliver and DeSarbo (1988) point out that EDT is a chain from expectation to repurchase intention to explain consumers’ degree of satisfaction as an outcome of a five-step process (Bhattacherjee, 2001a; Lin et al., 2005; Chiu et al., 2005). First, consumers form an initial expectation of a specific product or service prior to purchase. Second, they accept and use that product or service. Following a period of initial consumption, they form perceptions about its performance on the salient attributes. Third, they compare these

perceptions of performance with their prior expectation levels and determine the extent to which their expectations are confirmed. Expectations could be positively disconfirmed (perceived performance exceeds expectations), confirmed (perceived performance equals expectations), or negatively disconfirmed (perceived performance falls short of expectations). Fourth, they form a feeling of satisfaction or dissatisfaction based on their disconfirmation level. A moderate satisfaction level will be maintained by confirmation, enhanced by the delight of positive disconfirmation, and decreased by the disappointment of negative disconfirmation. Finally, satisfied consumers form intentions to reuse the product or service in the future, while dissatisfied users discontinue its subsequent use.(Chia- Hui Yen and His- Peng Lu (2008)

According to Davoud Nikbin, Ishak Ismail, Malliga Marimuthu and Ismael Younis Abu- Jarad (2011), Repurchase intention refers to the customer’s aim to maintain a relationship with a particular service provider and to make his or her next purchase in the category for this service provider (Jones and Taylor, 2007). Continued purchasing by current customers is an important concern because the cost of obtaining a new customer usually greatly exceeds the cost of retaining a customer (Spreng et al., 1995). As a consequence of satisfaction or dissatisfaction, repurchase intention is a critical factor affecting customers’ future relationship with an organization, its profitability, and thereby its business success (Reichheld and Sasser, 1990; Weun, 1997).

Repurchase intention (RI) is defined as the individual’s judgment about buying a service again, the decision to engage in future activity with a service provider and what form this activity will take (Hellier et al., 2003; Zeithaml et al., 1996). (Margee Hume and Gillian Sullivan Mort, 2010)

PRIOR EXPERIENCE

In research by Robert Johnston and Xiangyu Kong, (2011), they state that the experience (and value, Vargo and Lusch, 2004) is perceived purely from the point-of-view of an individual customer and is inherently personal, existing only in the customer’s mind. Thus, no two people can have the same experience (Pine and Gilmore, 1998). The benefits the customer gets from using and experiencing the service includes how they perceive they have “profited” or gained from the service provided and their experience of it, i.e. how well their requirements and needs have been met. Another outcome of the service from a customer’s point-of-view will be their conscious or unconscious assessment of the service provided (Zomerdijk and Voss, 2010), the perceived value of the service received (Bitner and Hubbert, 1994; Oliver, 1997) and their overall satisfaction or dissatisfaction (an emotion) (Carbone, 2004). These judgments, good, bad or indifferent, will result in intentions, such as the intention to repurchase or not, the intention to recommend it to others, or the intention to complain or not. These intentions may or may not result in action.

Paul G. Patterson and Richard A. Spreng (1997) discuss that in the post-purchase situation, the consumer has experience, and is thus familiar with the product/brand evaluation is therefore less influenced by extrinsic cues such as store name and ambience, brand image or marketer communication(Sweeney, 1994). Furthermore, post-purchase, the consumer, having firsthand experience with the product, is able to form satisfaction/dissatisfaction evaluations – but not in the pre-purchase situation. The current study captures value perceptions, satisfaction and repeat purchase intentions a short time following purchase.

On the other hand, every new experience with the company will supplement and adjust the cumulative satisfaction. As a customer gains more experience over time, we assume that, regarding loyalty, cumulative satisfaction becomes more important and less weight is placed on the current encounter (see also Boulding et al., 1999). Customers, for example, who are very experienced and have a high cumulative satisfaction, will probably not defect because of one unsatisfying experience. Their cumulative satisfaction works like a buffer, since the customers know that service quality is usually much higher. However, for a customer with no experience this might be the first and last encounter with this company. (Thomas A. Brunner, Markus Stocklin and Klaus Opwis, 2008)

In the research by Hee Yeon Kim and Fae- Eun Chung (2011), they discuss that with respect to research on green purchasing behavior, consumers’ past experiences with green products may be “crucial in forming the product-specific perception that would lead to future purchase intention”; in turn, consumers’ past experiences influence their purchases or use of green products.

PERCEIVED VALUE

A study by Phillip K. Hellier, Gus M. Geursen, Rodney A. Carr and John A Rickard (2003), when a single purchase of a product or service is made, the customer expects to receive a benefit greater than the cost, that is, the customer expects to receive value. If anything happens after the purchase that unexpectedly reduces or increases the cost incurred or benefit received, the perceived value is altered. The customer becomes less or more satisfied, which in turn influences subsequent customer value expectations, purchase behaviour and overall customer satisfaction (Carr, 1990; Voss et al., 1998; Woodruff, 1997).

According to Margee Hume and Gillian Sullivan Mort (2010), perceived value is identified in prior research as the benefit received by customers for the price of the service exchanged, or the overall utility of a product based on the perceptions of what is received and what is exchanged (Zeithaml et al., 1988.). Customers derive value from the exchanges and

the purchases they make. They derive value from factors such as convenience, from price savings, from emotional outcomes, from extra customer service and added extras (Jones and Suh, 2000).

According to Hyun- Hee Park and Pauline Sullivan (2009), purchase benefits are the various reasons behind people’s product purchase behavior. Accordingly, purchase benefits may influence how people feel in a shopping or purchasing context. Consumers come into consumption situations wanting different benefits and this in turn influences their pre-consumption expectations, including their affective expectations. Benefits sought influence future re-patronage intentions because benefits sought are the outcome of purchasing experiences.

Review of literature by Kuo- Chien Chang, Mu- Chen Chen, Chia- Lin Hsu and Nien- Te Kuo ( 2010), perceived value has been defined as “the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given” (Zeithaml, 1988, p. 14). In other words, customers compare the benefits of the service received with the necessary sacrifice required to get the service (Lee et al., 2004). As Heinonen (2004) notes, many of the conceptualisations of perceived value involve quality as the benefit and price as the sacrifice. This interpretation emphasises value as a monetary conceptualisation (Sweeney and Soutar, 2001; Nasution and Mavondo, 2008). Price is an important factor in customer satisfaction because customers tend to think

of price whenever they evaluate the value of an acquired product or service (Martı´n-Consuegra et al., 2007).

Zeithaml (1988, p. 14) defines perceived service value as “the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given. Though what is received (i.e. some may want volume, others high quality, still others convenience) and what is given (i.e. some are concerned only with money expended, others with time or effort) varies across consumers, value represents a trade-off of the salient give and get components”. Perceived service value is a subjective, distinct (Zeithaml, 1988) and dynamic construct (Woodruff, 1997; Parasuraman and Grewal, 2000). From her exploratory study, Zeithaml (1988) identified four meanings that consumers associate to value: value is low price; value is whatever the consumer wants in a product; value is the quality that the consumer gets for the price paid, and value is what the consumer gets for what he/she gives. In most studies, perceived service value has been conceptualized as a trade off between quality (benefits) and sacrifice (price). (Riadh Ladhari and Miguel Morales, 2008)

Beside that, George S. Spais and Kostantinos Vasileiou, in their research, they state that Kuznesof and Ritson (1996) suggest that the acceptability of genetically modified (GM) products increases with, among other things, higher use, perceived benefits, and perceived increase in

quality of the product (particularly taste and naturalness). Frewer’s (1997) results showed that perceived benefits had the most important influence on consumer purchase decisions, such as environmental impact and health-related concerns. Steenkamp (1989) and Kyriakopoulos and Oude Ophuis (1997) maintained that the concepts of perceived value can be applied to organic food research and have provided useful insights into buying behavior. Kyriakopoulos and van Dijk (1997) also applied the concepts of perceived value when examining how consumers form their purchase intentions for organic extra virgin olive oil. They have presented a model for the evaluation of organic foodstuff at the “postconsumption” level.

As pointed out by Bolton and Drew (1991) perceived value is a “richer, more comprehensive measure of customers’ overall evaluation of a service than service quality” (p. 383). (Paul G. Patterson and Richard A. Spreng)

PERCEIVE QUALITY

Indeed, the quality of the final product that reaches the customer is clearly the result of a chain of successive, inter-linked phases: spinning, weaving, apparel and distribution. In the new competitive situation that has been developing within the sector, quality can no longer be

considered the preserve of high fashion or expensive clothing, but must be a feature of all market segments and meet the specific requirements

and tastes of all types of customers (Forza and Vinelli, 1996; Itex, 1997). The quality of the details, such as the accuracy of the stitching (correct distances, no ruffling or pleating, etc.), the characteristics of the materials used for linings, the extent to which the cloth stretches or maintains its shape (suitability of the model for the customer’s physiology, tailoring to fit the shoulder blade, etc.), the quality and perfection of the garment’s final pressing (cfr. wearability) and the reproducibility of colours (shades), must also be guaranteed. (Pietro Romano and Andrea Vinelli, 2001)

Graham Whittaker, Lesley Ledden and Stavros P. Kalafatis (2007), discuss that price/quality value represents an evaluation of functional aspects of value relative to the give aspects of the consumption experience. More specifically its accounts for customers’ perceptions of the service they receive in exchange for what they give in terms of payment/sacrifice. Value is something that is perceived by the consumers/ customers rather than objectively determined by the seller and that value includes benefits and sacrifices, or perceptions of what is received and what is given.

According to Mathew A. Waller and Sanjay Ahire (1996), quality of the product perceived by the customers may be a complex combination of the

actual quality of the product that customers purchase from the firm, and customers’ views of the overall quality reputation of the firm. Hence, from a purchasing manager’s perspective, the customers’ view of the firm’s products will be reflective of the product specific view

and views about the firm’s quality efforts.

Marielle E. H. Creusen, Robert W. Veryzer and Jan P. L. Schoormans (2010), mentioned that in stores, the more expensive audio equipment (e.g. the brands Bang & Olufsen and Loewe) indeed often has a simple, non-cluttered, design. However, for complexity one could also envision an effect in the opposite direction, so that higher complexity heightens perceived quality. More controls make a product look more complex. As it has more controls, people may expect a complex looking product to have many functionalities. People could interpret a product having many functionalities as a more “high end” product. While they may not want the larger number of functionalities per se, more functionalities may signal a more “high end” product and thereby higher quality to them

CHAPTER 3

RESEARCH METHODOLOGY

3.0 INTRODUCTION

In this section, research methodology will discuss clearly researcher research plan. This chapter will cover the research design that is used in conducting marketing research project. All the method used to gain understanding and answers to the research objectives, research questions and the research hypotheses. This section discusses the methods used in the study. The scope that will be discuss including the research design, sampling and data collection, the instruments used for the research, measurement and scaling, and the procedure in data analysis.

3.1 RESEARCH DESIGN

According to Malhotra (2007), research design is a framework or blueprint for conducting the marketing research project. It details the procedures necessary for obtaining the information needed to structure or solve marketing research problem. The researcher used the descriptive research method in this study. The descriptive research is the type of the conclusive research that has as its major objective the description of something, usually the market characteristics or functions. This type of research was being used to describe the factors that influence the repurchase intention towards Batik Kelantan. The surveys and the observation methods will be used in this research to gather the information.

3.2 TYPES OF DATA

This section is very important to researcher to get the clear view of their studies. In this research, the researchers have decided to use two types of data. These two data are primary data and also the secondary data.

3.2.1 Primary data

Primary data can be defined as data that originated from researcher that have been used for specific purpose of addressing a problem at hand (Malhotra, 2007). In this research the primary data were collected from the batik usage. The data were collected through questionnaires that are distributed to the target

respondents. Besides that the researcher supports the data collection through interview and observation.

3.2.2 Secondary data

Secondary data is a


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