Monday, June 8, 2020

Online purchase - Free Essay Example

Search and Purchase Correlation in German Online Market Dynamics and Trends Purchasing Drivers for Customers Abstract More and more people make online purchase; buy different kind of goods in online stores. Targeting on these people becomes opportunity as well as challenge for marketers. Understanding what are the main drivers of people preferring to buy products and services online rather than offline has become main area of research for many stakeholders. Researchers analyze the topic form various angles, they try to find main online purchasing drivers for customers, which make them prefer to go to online stores rather than real ones. Building a reliable model on that factors which will make predictable the future of online purchase dynamics, is one the purposes researchers aim to achieve. My thesis will be one more contribution in that area. It will be unique in the way that its analysis is based on most recent facts which cover 4 years dynamics and tends in that field on German market, starting from 3rd quarter of 2005 until 2nd quarter of 2009. Looking at facts through this time frame should give us opportunity to observe if there is any recognizable change in â€Å"customer behavior†: if the trust towards online purchase is increasing which is reflected on the increased amount of sold products in online stores, and which factors or purchasing drivers can be applicable for explaining these trends. To be more specific, I will divide my thesis in several important parts: first, I will try to find out if there is any connections between the amount people spend with the internet stores and the amount of products the buy, or in other words, if there is any evidence of correlation between the â€Å"product search† and â€Å"product buy† amounts. This will be done by running regression analysis based on internet traffic data provided on web site (in more details it will be discussed in the INTRODUCTION part). Second, after tracking the statistically significant relationships between these two factors: â€Å"search† and â€Å"buy†, where second factor depends on the first one, I will try to dived this relationship between â€Å"explainable with search amount† and â€Å"explainable with other factors† parts. Then I will try to cover already famous literature, which is explaining the motivators of people searching goods online. Finally, we will talk abo ut other factors, which might explain online purchase behavior but they are not prone to the underline logic of our model, or just simply are beyond or the factor â€Å"search† as an explanatory of â€Å"buy† rate. As a conclusion I will summarize my findings in the topic. 1. Introduction Developing of technologies and internet has born for people new opportunities changing our behavior and our attitude to many things. Without any exaggeration it has dramatically changed our lives. In many activities Internet has given us opportunity to save our efforts, time and sometimes even money. One of the areas internet has made dramatic affect is shopping. Online shopping becomes more and more important part in our everyday life. Referring to the Chen Chih-Chung and Su-Chao Chang common research in 2005, â€Å"if in 2004 online shopping was only 7% of retail sales in USA, in 2010 it is expected to reach 13%†. Marketers are paying more and more attention to the opportunities lying in online world trying to analyze and predict the trends and movements there, in order not to miss their chance, while in the fierce and almost saturated competition in offline shopping, online market is almost only way of fast growth. In order to succeed in online shopping one of the m ost important aspects for marketers is to understand their potential clients _ what makes them buy goods in virtual stores rather than in real ones, what are the key factors and drivers which initiate them to conduct online purchase. The final goal of the thesis cant be to find the only model with only factors which describe pretty exactly the determinants and intensions of customers. Many researchers try to explain the phenomenon such as online purchase intension and I will one of the also. Hope to make my little contribution in that field. In this Thesis I apply some academic researches, online traffic data analysis available on AGOF, bring some insights from ESMT practice project conducted with my per classmates in Axel Springer consulting team and also will refer to one questionnaire conducted for the same practice project. Based on these information and my personal observations I will try make some more insights not only in above mentioned online purchase determinants for customers, what makes them to pay money online, but also I will try to analyze overall trend and dynamics in online shopping during last four-five years. I will try to make some insights which products were sold mostly through internet several years ago and which are sold now, through which web sites. Which Internet-content-areas were most employed years ago and which are emerging now. Finally, I will try to build a model explaining the intension of purchase through different factors. Even more challenging is converting offline shoppers into online shoppers, but before achieving that, marketers in the industry have to understand basic drivers _ what make people buy different things on-line instead of going to supermarket, understanding whether it is general trend that due to the technologies development people change their purchase habits and more and more people transform form off-line into on-line shoppers and hence the future of e-markets is sunny with plenty of room and e ver growing possibilities, or there is something special which catches peoples attention, which affects their decision making process in particular situation and makes them preferring buying things in virtual world. Something which makes them â€Å"take more risk† and without having possibility to touch the product and checking its quality pay money in it and at the same time be sure that his decision is right. My thesis will be one more contribution in understanding above mentioned online-purchase drivers. Besides referring to already published academic researches and newspaper/magazine articles, I will try to analyze internet traffic data, to look at the developments and trends over last four-five years, if there is any content-wise change what people were buying several years ago and what they are buying now. This observation should give us additional information if there is substantial difference in amount of purchased quantity of different products, if it so, we have to analyze what induces these differences, why are definite kind of products sold through internet more compared to others. Finally, defining key online purchasing derivers, I will try to classify them with respect of relevance and importance, try to understand their correlation and final affect on purchasing decision. 2. Literature Review Literature, different researches and publications, were basically used for explaining the driving factors of people who search and buy products online. By analyzing various sources I tried to come up with common understanding of drivers which motivate people in conducting online purchase. Besides academic and non-academic researches, some insights from area experts were also taken in consideration. These experts were interviewed during consulting practice project, which I and my three other peer class mates conducted for one of the European leading media companies, about the topic â€Å"how to monetize online content†. Kevin Wises and Hyo Jung Kims publication in Cyber Psychology Behavior in November 2008, named â€Å"Searching versus Surfing: How different ways of acquiring content online affect cognitive processing† elaborates about distinctions between different methods of search people apply online. Authors claim that there are two different types of search: s earching and surfing. In first case people are aware of their will. They look for something objectively, whether in another case, they just wander in internet, without aiming on finding something specific. Testing differences between these two models with different type of examples and quantitative models and assessment tools, gave evidence that, depending on that whether people surf or search internet, differences not only final content of found information and then they way how these people remember details about the searched product, but differences also the biological processes which take place in these people while looking for information. Depending on the model used, they hade different level of arousal and different pace of hart beating. Authors conclude that, â€Å"being there† and â€Å"getting there† makes big affect on the final outcome of searched data. M. Bosnjiak, M. Galesic and T. Tuten in their â€Å"Personality determinants of online shopping: Expl aining online purchase intensions using a hierarchical approach† published in Science Direct in 2007 make focus on personality determinants of online shopping behavior and the study is based on the on the work of Mowen about hierarchical approach to personality (Mowen, 3M Model, 2000 will be described below). Besides Mowen, authors widely apply to some other researchers and academics works. It could be perceived as almost perfect summarization of most valuable researches conducted on this topic by other researchers. One of the theories they apply is Pachuris 2002 work, where he tries to explain approach to online shopping behavior through four categories: 1) economics of information approach, 2) cognitive costs approach, 3) lifestyle approach, and 4) contextual influence. 1) Economics of information approach elaborates on perceived efficiency of buying online. It focuses on consumers preferences on shopping channels taking in consideration and comparing different alternativ e subjective costs including time costs. Perceived cost of shopping online should be less then shopping offline, if that is not the case, then consumers will not apply to inline purchase. 2) Cognitive costs approach elaborates on search-related cognitive processes and claim that consumers take decisions based on price and quality of the products, as well as reliability and credibility of online stores. Their final aim is to minimize cognitive costs associated with the actual purchase. 3) Lifestyle approach focuses on the type of life consumers lead, and their socio-demographic habits of money spending, interests, motives, values and opinions. Here they quote Alerck and Settle (2002) investigate regarding the time saving as a motivator of online shopping, where they conclude that surprisingly online consumers do not shop because Internet is perceived as the time-saving factor during shopping. 4) Contextual influence approach makes focus on navigational aides as well as atmos phere. Quoting Senecal et al. studies (2005) they repeat that recommendations in buying process to the customers who are exposed to the product make decision more complex but in fact it does not change final outcome. The work claims that despite all four points give us some insights and knowledge about online purchase motivators, it does not exactly examine the traits affecting the willingness of shopping online and still makes hint on the psychological portrait of every individual, and it seems that online and offline shoppers psycho-portrait differs from each other (Donthu and Garcia, 1999). Online shoppers seem to be more innovative people who are willing to take more risk and experience new feelings rather than non-Internet-shoppers. Mowens 3M Model of Motivation elaborates more on personality, takes I consideration individual differences and tries to draw the portrait of online shoppers. It applies four hierarchical levels: surface traits, situational traits, compound tra its and elemental traits. All these are hierarchically dependent on each other with the order they are presented. Situational traits (affective involvement, cognitive involvement) affect surface traits (intention to shop online), then come compound traits which often are developed through socialization (need for cognition, need to evaluate, need for arousal, need for material resources), but they are affected not only from external factors but also with personal experiences and socialization history with the traits at the highest level of model (elemental traits neuroticism, conscientiousness, extraversion, openness, agreeableness). â€Å"Effects of consumer Trust and Risk on online purchase decision making: A comparison of Finnish and United States students† (authors: C. Comegys, M. Hannula, J. Và ¤isà ¤nen) published in August 2009 by International Journal of Management, as we understand from label, makes focus on consumers trust and risk perceiveness during online pu rchase. They go through Kotlers five stage Consumer Buying Decision Process (need recognition, information search, evaluation, purchase decision, post-purchase behavior) and investigate how risk and trust theories work together through these five stages. Based on hypothesis testing method they also examine such factors as gender, changes over time and purchase volume. Finally they suggest managerial implications. Chen Chih-Chung and Su-Chao Changs â€Å"Discussion on the behavior intention model of consumer online shopping† tests and extends the Theory of Planned Behavior (TPB) models by examining variables of past experience and purchasing channels knowledge, in predicting consumer shopping. TPB elaborates that not all human decisions are explained and motivated by personal will, but rather they are somewhere between completely and incompletely controlled by personal will. In this research, authors exercise different factors, such as attitude, subject norm, perceived beha vior control, behavior intention, past shopping experience and consumer channel knowledge through multi-regression analysis model with level of significance p0,01. Jonna Jà ¤rvelà ¤inens â€Å"Online purchase intensions: An empirical testing of a multiple-theory model† (2007, Journal of Organizational Computing) concentrates on understanding how consumers choose their purchasing channel when the environment is relatively stable. The factors tested are: preferring conversation with customer service, complexity of product, prior online shopping experience, social influence or perception of system usefulness or ease of use. This model also offers to test some hypothesis and then builds correlation matrix to identify extent of final influence of each factor. Finally it summarizes theoretical and practical implications. â€Å"A model of the determinants of purchasing from virtual stores† by R. Bakhri, F. Belanger and J. Hiks (2008, Journal of Organizational Computin g and Electronic Commerce) describes the consumer purchase decisions in a virtual stores. It makes focus on how individual visiting online stores could be affected to purchase from such a stores. Factors such as perceived usefulness, perceived behavioral control, perceived peer influence are tested through several hypothesis built in a quantitative model Chi-square analysis. The research discusses the design of stores as a tool leading to a purchase decision. As a conclusion I would say that literature contributed me not only in understanding intensions and drivers of online customers which make people start search for products objectively, but also to understand what are some other factors which are not among the factors motivating search, but are in the â€Å"un-explainable by search† part of our regression analysis and affect final decision of purchase. 3. Identifying correlation between the quantities of searched and purchased products. Analyzing AGOF data 3.1. What is AGOF? Founded in 2002 by German online marketers and online advertising media, AGOFs area of interest include activities such as: advertising market, meaning media agencies and online media planners, marketing decision makers at advertisers, marketers as well as other market partners. It has 17 members and 60 licensees and its studies are audited by independent third parties. AGOF collects and analyzes data about customers usage of internet, analyzes it through different criteria and segments (differentiated by sex, age, education, working status) and thus makes internet advertising more transparent and predictable. AGOFs approach is to sort and analyze everything through â€Å"unique user†, and the methodology applied is multi-method model, which means: collecting data about unique users (unique computer) with three different ways. Main source is the electronic measurement (data collection) is a basic, and the other two, telephone interviews and on-site surveys are complementa ry for fulfilling the data. Individual clients account measures more technical inputs such as page impressions, visits, time (when), content related topics (content on IVW level), whereas online survey collects the information about clients themselves and their computer usage habits: socio-demographic data (age, gender, education†¦), place of use, information on computers (number of users, login, etc). AGOF renews its information on the quarter basis, publishing the internet facts of previous three months, tries to catch with latest dynamics to make internet more predictable and plannable for marketers. Also, it constantly tries to further develop internet facts study. Analyzing relationship between â€Å"search† and â€Å"buyâ€Å". Conversion rate Before I move to the main part of the thesis, and use the â€Å"search† data as the main explanatory of â€Å"buy†, I will try to conduct multi-step analysis, first find out if there is any statistically significant relationship among these two factors. For this purpose I will test two hypotheses: 1. H0: B = 0, there is no statistically significant relationship between these two factors 2. H1: B 0, there is statistically significant relationship between two factors We will test these hypotheses on p0,01 significance level. Then if there is any correlation between â€Å"search† and â€Å"buy† we will interpret this confirmed correlation through the time-line across all products. Finally we will try to find main explanatory drivers and motivators of online purchase, academics and different publications talk about. Before testing the hypothesis lets review what it means for two variables being correlated to each other: to claim on correlation be tween X independent and Y dependent variables, the following should occur: * X proceeds Y * Y must not occur if X does not * Y must occur whenever X occurs As we know, the last point is not always the case, and very often people search products but do not buy them. One of the explanations of this â€Å"phenomenon† is nicely described in Kevin Wises and Hyo Jung Kims research named â€Å"Searching versus Surfing†, published in 2008, with the purpose to find out whether the content of acquired online media changes or not depending on the way how it acquired. The â€Å"surfing† part describes situation when people just â€Å"wander in the internet† without aim to buy anything. For us it is important to understand what makes these wanderers not aiming to purchase, suddenly change their mind and conduct online shopping. More important for us is to understand the purchasing drivers of those people who go shopping online consciously and predetermined . Or as this article explains, we are going to describe different motivators of â€Å"being there† and â€Å"getting there†. For the first step of our analysis, we are taking 26 different products from AGOF database (list of products in Appendix 2), for which we have different observations for every quarter, and then we run one linear regression for 4 year time observations. In total we will have 416 (26 products multiplied on 16 quarters) observations in the regression analysis (Appendix 4). As the results of regression show on appendix, R Squared is 0,8422 which means that about 84% of buy data can are explainable with â€Å"search†, and if we explain what are the motivators for people to search or surf on internet, then we will make one more step towards making internet purchase process more explainable and predictable. Other 14% of data can be explained with some other factors rather than search, and in later stage of the thesis we will have a talk on the se factors either. Besides R Squared, there are some more important coefficients in our results of linear regression, which are worth to pay attention. P-value as well as F-value in ANOVA table, is almost zero with 168 level, which tells us that from two hypothesis previously developed by us, we can reject first H0 hypothesis with p0,01 significance (1% significance level) and claim that there is statistically significant relationships between search and buy data. Some other coefficients which are worth to interpret are slope and the intercept: * Y intercept B0, in our case 1,13 says how many products are bought when â€Å"search† rate equals to zero. Once we have not any observations on zero â€Å"search† level, then its interpretation will be dubious practical value. * Slope B1, 0,53 in our regression, can be understood as change in half-year â€Å"buy† quantity, when â€Å"search† is increased by one degree. On the second stage we should inte rpret this confirmed correlation through the timeline, across different quarters across all 26 products participating to understand if the conversion ratio of search into buy changed over time. Because it is suggested to have more than 26 observations for running more reliable regression analysis, we will unite two quarter data under one group/label â€Å"half year†, thus doubling our sample of observations and running regression on 52 observed products. In 4 year time period we will 8 different half-years and thus 8 more new regressions should be run. After running eight different regressions, to facilitate overview of results I gathered major coefficients in one table and then built some graphs to indicate trends better for R Squared, Intercept, Slope and P-value (Appendices 6 and 7) As table on Appendix 6 and the slight but constant increase over time of R Squared show (P-value decreases over time), correlation between search and buy rates increase, which means, more and more actual purchases become explainable with search rate, so more and more actual purchases become prone to logical explanation by different purchasing motivators researches have investigated. Other 14% which on its side is also decreasing over time, which means less and less purchase are non-explainable by search factor and its motivators. 4. Defining purchasing drivers based on academics researches, publications and expert insights As we already saw in literature review part, different academics have different approaches toward this problem; they all try to find the most appropriate criteria which will be most accurate measure of on-line purchase willingness. They try to test their theories and models form various angles, starting from personal psychological characteristics and portrait of people, continued with previous purchase experience, poor IT skills, affect of different external factors such as socio-demographic or the shopping channels used during process. Lookin g at the models of different publications and researches we can structure general criteria and factors which might be main motivators for conducting online purchase. Despite that these works never are the same they still have quiet much in common. We can categorize these factors as those, which might be logical motivators for searching products in internet and those which affect final â€Å"buy† quantity but are not explanatory factors for search motivation. As we already ran regressions on AGOF data for half-year time periods to look at the changes through 4 years time frame and we have clearly visible relationships between search and buy factors, where search as an independent variable mostly explains buy rate outcome with even increasing tendency, we can now try to correlate quantitative outcome with theory and try to interpret figures in purchasing drivers. But, lets first discuss separately what each article and publications tell us and then let us try to unify the m under one structure. In â€Å"trust and risk† theory already discussed in literature review, authors categorize eight different risk factors associated with internet purchase; these factors play important roles in every stage of the buying process. 1) performance risk related to product performance 2) time risk involved in transaction timed needed for shopping 3) financial risk absolute cost may be higher than in conventional shopping 4) delivery risk- the product may not arrive or may arrive late 5) social risk how friends and family react 6) privacy risk whether personal information is secure or not 7) payment risk financial consequences from sharing the credit card number 8) source risk reliability of the information on web-site Authors conclude that privacy, source, performance and payment risks were considered as the most crucial of risk in electronic business. Some of the hypothesis developed in the research found justification and also some other findings were: a) There is a positive relationship between the amount of consumer online trust and the online purchase volume b) There is a positive relationship between the amount of consumer online trust and the possible increase in purchase volume. There was evidence that people with little trust towards e-vendors significantly reduced purchased volume of products over time. c) Amount of risk-taking does not have any influence on purchased volume d) Risk and trust factors were perceived independently from five stage purchase process during buying process itself. â€Å"Behaviour intention model† which came up with following factors as purchasing drivers: attitude, subject norm, perceived behavior control, behavior intention, past shopping experience and consumer channel knowledge, finally concluded: a) Consumers attitude will affect their shopping behavior b) Consumers subject norm to online shopping will affect his/ser purchase beha vior c) Consumers perceived behavioral control to online shopping will affect his/her purchase behavior d) Consumers past online shopping experience will affect his/her purchase behavior e) Consumers internet channel knowledge will affect his/her shopping behavior f) The perceived behavioral control is not significant Further more, research agrees that consumers increased channel knowledge will grow in increased shopping intention. In fact the same concludes another, â€Å"online purchase intension model†, or â€Å"multiple-theory model†, which studies the affect of online channel in a relatively secure environment. This theory comes up with some interesting findings, but before quoting those findings, I will describe the theory approach itself: In the model, author looked to the case of purchasing behavior through eight different factors: PU, PEOU (Appendix 1), conversation preference, prior online experience, previous online booking experience, prod uct complexity, task ambiguity and social environments attitude. Covariance table was built for checking the relationship of each factor towards the final outcome. As covariance table showed, none of above mentioned criteria was significant determinant of result on its own; however some combinations like PU-PEOU might have become not big but statistically significant. Also, the model made evidence that: a) Prior online purchase experience has a significant positive effect on behavioural intention b) With increased experience a customer begins to trust online channel more c) The more customers are willing to repurchase form any given site, the more tend to shop on-line in general positive relationships with repurchase intension and purchase volume d) Trusting customers tend to be more loyal than who are risk-neutral. Loyal customers are typically satisfied with the service/products they receive â€Å"Experience with traditional and online channels had a conside rable impact on channel choice, as well as PU. The effect of social environment was smaller but statistically significant. Inexperienced customers who do not find online shopping quicker, cheaper, suitable, for shopping, or easier to find information are likely to abort the online shopping process and finish it offline.† Experience had such a big impact that special efforts should be done by companies to create first pleasant shopping experience. Some other important findings were: a) Some people, who do not want to shop elsewhere than in a store, do not perceive any convenience in for example online shopping. This again comes to the individualistic approach of different people. b) The social environment has a significant positive effect on behavioural intention and PU of the system Theory claims that the main reasons to purchase online could be: convenience, broader selection, competitive pricing, product choice, product value, greater access to information Do IT skills matter? What really matters rather than IT skills is trust towards the online shopping, which is something which comes with experience of internet usage. As conducted research among Fin and American students show, any difference in trust factors among consumers lay beyond the IT skills. It something deeper, which in most cases is inexpiable because perceived risk is very individual and comes from personal characteristics * Described in of Jonna Jervelà ¤inens Multiple-theory Model, â€Å"Technology acceptance model (TAM), which is based on two basic concepts, perceived usefulness (PU) and perceived ease of use (PEOU) tries to somehow answer that question. Experience with traditional and online channels rather than pure IT skills, had a considerable impact on channel choice, as well as PU. The effect of social environment was smaller but statistically significant† General insights in academics researches Lets sum up also some more general knowledge also, different research ers and stakeholders got about the internet: Here are some important findings: * Those who have less risk perception associated to the internet purchase buy more but at the same time we should consider that risk perception reduces due to the usage the internet over time. More experience customer has more he starts to trust the online channels. Hence heavy internet users buy online more than those who use internet less. Women and men perceive risks differently no matter the level of their technical or any other skills and no matter the environment * First online purchase experience has a significant influence on customers behaviour in the future. If a consumer had a negative experience during first purchase process, e.g. during booking tickets online, it less reliable that he will come back and try some other time. This explains why companies try to make positive first experience in their consumers buying behaviour and very often with different approaches try to incentivise them to conduct the purchase * Having positive prior experience increases the tru st of customers towards channels. There is always less possibility that trusting, loyal customer will be unsatisfied with the product/service he receives * Experience is so important that it is recommended to be taken in consideration while making the design of site. Even more as researches show, very often people take purchase decisions based on emotions rather than reasonable judgment and actual need of the product * There is positive correlation between total volume purchased by a customer and his repurchase intention rate from any other site. * Increased security perception in terms of provided personal information safety does not increase significantly consumers willingness to buy more. At the same time risk perception for customers is on peak when they enter their personal information. Thus we can conclude that companies should not make barriers to the customers during purchase procedure * One of the main factors which can make believe people to by products online is having possibility of returning them back, in case they do not like it will not meet their expectations after receiving it * Overall costs perceived during online purchase should less than during offline parches. If is more or the same, than consumer will not by online. In other words it should be more â€Å"convenient† for client to prefer buying online Interpreting increasing dynamics of regression analysis coefficients As we saw in previous topics reviewing academic and non-academic researches and their findings regarding purchasing motivators, purchasing channel preferences and etc. we can conclude that the trend we came up in our regression analysis (Appendices 6 and 7) is very logical reflection of what researches say. Increased R Squared value means that hypothesis mentioned by us in previous topics as the explanatory factors gain more and more credibility. They become more prone to the logic, which tell us that, over time, people get more experience of using Internet, thus their fear and risk averseness towards online purchase decreases: two main factors benefit two that: shifting the proportion of generation distribution, thus more and more old people become skilled in internet usage (those who were young several years ago) and another is socio-demographic affect or in other words peers or friends influence: once more people buy start trusting online purchase at least because of gained experience in the area, more people they will recommend. So, the conversion ratio of search to buy data will increase, as well as absolute number of online shoppers. Some other factors explaining this phenomenon might be the marketers themselves who are now more aware about online customers and their behaviour rather than several years ago, when industry was new and emerging. Many marketers possibly also realized that sometimes it might be nice, attracting design and correctly delivered massage, rather than customers actual need which will make them buy products online. Marketers started â€Å"attacking† the customers by asking with different flexible approaches to buy for some products and services online, and in many cases they become successful, once as we mentioned they are now more educated, and customers also become more trustful towards internet shopping. Factors not explaining the search amount As Mowens 3M Models one of the surprising findings is that sometimes important determinant which makes people to purchase goods online, is affective rather than cognitive involvement. In other words, decision sometimes is made purely on emotion merit rather than reasoning. This might be partial explanatory factor of those 13% of error term we got in our regression analysis last â€Å"half-year† coefficients. The other explanatory factor might be e.g. easing of payment for the good online. Because mostly this is the factor that customer is not aware the specifics about from the very beginning of purchase decision and when comes at the stage of real purchase, way of payment (easiness, clarity, quantity of information required) might become either motivating factor or discouraging one. 5. Conclusion As dynamics show slowly but objectively more people become online buyers, and also more consciously they become regarding online purchase (which is reflected in regression analysis coefficients) meaning that they need less and less page impressions (search clicks) to conduct actual purchase. I think this trend will continue because many facts already mentioned by us, contributes to this dynamic. As we mentioned, more experience with online has positive relationship with increased purchased volume. Another factor is the successful prior experience which also positively contributes towards increased purchased volume and finally the affect of your social network. Marketers should take in consideration some important factors which affect either negatively or positively the buying decision: * Sometimes people make online purchase on emotional basis rather than cognitive, so attractiveness of massage and design of site has big importance * Ease of payment system is another facto r contributing to increased amount of online sales * Increased security measures regarding filling the personal information, in not transformed in increased perception of safety. Even more, risk perception from customer is on the peak while entering online his name or his credit card number. Thus marketers should target on minimizing risk perception for the customers and hence boosting sales * Once successful prior experience with online purchase has invaluable impact on customers further behavior, marketers should aim to create first pleasant experiences of online purchase for their customers * Customers should have opportunity to return product back, is they do not like it after receiving As we managed to show in our analysis, there is a strong correlation between search and buy amounts in internet. Marketers should target not only â€Å"buy† traffic records, but also, â€Å"search†, because as we mentioned customers need time to become more loyal towards online shopping, time and experience converts them more trustful. Besides, sometimes purely emotional arousal might become the basis of consumers decision, thus give them opportunity to sea a nicely designed massage, might convert them in from neutral to active customers. References M. Bosnjak, M. Galesic, T.Tuten (2006) Personality Determinants of Online Shopping: Explaining Purchase Intentions Using a Hierarchical Approach ScienceDirect (, Journal of Business Research 60 (2007) 597 605 Jonna Jà ¤rvelà ¤inen, Online Purchase Intensions: An Empirical Testing of a Multiple-Theory Model Journal of Organizational Computing and Electronic Commerce 17(1), 53 74 (2007) Chen Chih-Chung, Su-Chao Cahng (2005) Discussions on the Begaviour Intension Model of Consumer Online Shopping Journal of Business and Management vol. 11, (2005) Reza Barkhi, France Belanger, and James Hicks, A Model of the Determinants of Purchasing from Virtual Stores Journal of Organizational Computing and Electronic Commerce, 18: 177 196, (2008) Copyright  © Taylor Francis Group, LLC; ISSN: 1091-9392 print/ 1532-7744 online; DOI: 10.1080/10919390802198840 Charles Comegys, Mika Hannula, Jaani Và ¤isà ¤nen, Effects of Consumer Trust and Risk on Online Purchase Decision-making: A comparison of Finish and United States Students Vol. 26 No. 2; (August 2009) Kevin Wise and Hyo Jung Kim, Searching Versus Surfing: How Different Ways of Acquiring Content Online Affect Cognitive Processing, volume 11, Number 3, (2008) Traffic data analysis Power Point presentation from internet web-site: graphiken if 2009 ii Traffic data from internet web-site Appendix 1: Terminology Explanation of some words or phrasal words, which in everyday life could be understood with many different meanings, but in my thesis they bear one and only one underlined meaning: AGOF German internet web-site tracking internet traffic data based on multi-method model AGOF clients German audience more than 14 years old using internet Conversion ratio the ratio of searched and purchased products in internet, indicating the rate by which â€Å"search† are converted in â€Å"buy† Customer behavior customers attitude towards online purchase on average, their intention to search and then by products online. The pace they search and buy products at a definite period of time Changing customer behavior any changes in amount of searched and purchased products in particular period of time compared to other period IVW German internet web-site tracking internet traffic data Unique user individual user in internet, individual computer Technology acc eptance model (TAM) consists from two major concepts: the perceived usefulness (PU) and ease of use (PEOU) of a system. PU users subjective perception of the ability of a computer to increase job performance when completing a task PEOU persons subjective perception of the effortlessness of a computer system Appendix 2: List of products on which analysis are conducted Alcoholic bavareges other alcoholic beverages and spirits Books computer and videogames computer hardware and accesoories computer software without games Tickets for movies, theatre, classical concerts, pop concerts or sporting events Movies on DVDs, Videos cheap air tickets from airlines Pay to music or movies from the internet as a download Investments, shares, securities, funds Health products and medicines DIY or DIY tools Hotels for leisure and business trips Charges Lottery Games Life and annuity insurance as private pension rental cars Music CDs Furniture or objects on the furniture Perfumes, fragrances for men or women shoes Sporting goods, sports equipment Sweets and salty snacks Telecommunications products, e.g. Cell phones or cordless phones Frozen foods and ready meals Holiday travel and last-minute travel Appendix 3: Number of Internet users in Germany in the second qurter of 2009 Source:, Population in Germany (people more than 14 years old) _ 64.82 million People who use Internet _ 43.20 million Internet users observed for surveys (people who used internet last three months) _ 42.22 million Appendix 4: Regression analyses for finding out relationship between â€Å"search† and â€Å"buy† data Appendix 5: Uniting two quarter data under one group for the sake of regression analysis Appendix 6: Important coefficients from eight different period regression analyses Columns: SS explainable Regression sum of square. Portion of â€Å"buy† explainable by â€Å"search† SS Residual Residual sum of square. Non- explainable part of â€Å"buy† factor with â€Å"search† SS Total Total sum of square R Squared Portion of â€Å"buy† explainable by â€Å"search†, as portion form 1 Non Explainable Non- explainable part of â€Å"buy† factor with â€Å"search†, as portion from 1 Appendix 7: Graphs representing trends in regression analysis coefficients over 4 years time period R Squared increases over time, which means, more and more „buyâ€Å" data are explainable with „searchâ€Å" data, thus the purchase motivating factors described by academics become more and more prone to the logic. It also is a matter of experience, social affect, improved IT skills, and trust towards channels as well as online purchase as the whole P-value approaching to zero means that hypothesis about â€Å"search† and â€Å"buyâ€Å" data correlation gain more and more viability

Sunday, May 17, 2020

Description Of The Retailer Charming Charlie - 1628 Words

The objective of this report is to provide an in depth analysis of the retailer Charming Charlie, in regards to store layout, design, and visual merchandising. Emphasis will be placed on the store’s attraction to the target market, layout organization, and brand image consistency. Charming Charlie is a women’s contemporary jewelry and accessories specialty retailer. The following information is based on the observation of the Charming Charlie’s location in Ashley Park, which is a shopping center in Newnan, Georgia. Appearance According to the statistical analysis conducted by the Nielsen Company, there are 5 major segments for the zip code 30263. The most common attributes among these segments are: busy lives, creative, and prefer value shopping. This is a perfect location for Charming Charlie because their mission is to help their customers â€Å"unleash their one-of-a-kind style.† This allows their consumers to use their creativity to put together an ideal outfit. Charming Charlie is located in the shopping center just a few miles away from a major highway (I-85). A smart move Charming Charlie made was to place the store on the opposite end of the shopping center, which is a good distance away from DSW, another specialty retailer. DSW offers a wider variety of shoes and accessories, which can become a major competitor. As far as the location, Charming Charlie fits in perfectly. With the industrial style ceilings and spotlights, it blends in well to the surrounding storesShow MoreRelatedBrand Bui lding Blocks96400 Words   |  386 Pagesdrinks, price competition is at center stage, driven by the power of strong retailers, value-sensitive customers, reduced category growth, and overcapacity (often caused by new entrants and by old competitors hanging on, sometimes via bankruptcy). Retailers have become stronger year by year, and they have used that strength to put pressure on prices. Whereas a decade ago, the manufacturer largely controlled information, retailers are now collecting vast amounts of information and developing models to

Wednesday, May 6, 2020

The Combat Against Poverty Has Been An Ongoing Battle That

The combat against poverty has been an ongoing battle that perpetually mimics a stalemate, that is, regardless of what the world throws at it - poverty seems invincible. Furthermore, after the development of the Millennium Development Goals (MDG) by the United Nations in 2001, a handful of Non-Government Organizations (NGO) and business entities began capitalizing on the creation of these MDG’s. That being said, many NGO’s distributed MDG related advertisements (which incorporates the heart warming feeling individuals get when helping others) in order to encourage the public to donate to impoverished countries. Whereas, business corporations utilize a unique business model that encourages the public to buy their product in order to help†¦show more content†¦. .† (Kon, par. 8). As stated above, NGO’s have been operating advertisements in a way that frames countries as resource poor areas. In other words, the organizations are portraying how individuals in third world countries are incapable of finding a job due to their supposedly resource depleted, and thus economically inviable countries (Poverty Inc.). For example, Africa, in terms of natural resources, is â€Å"the worlds richest continent. It has 50 percent of the world’s gold, most of the worlds diamonds and chromium, 90 percent of the cobalt, 40 percent of the worlds potential hydroelectric power, 65 percent of the manganese† (Williams, par. 1); however, the African country is usually the star of many documentary films concerning poverty. Thus, the propaganda used by these organizations, which stimulates an influx of donations, are presented in an fabricated manner that falsely represents these countries; however, the spike of donated goods does not only come from the influence o f NGO’s, but also from for profit businesses corporations. A handful of business entities around the globe have capitalized on a business model that both stimulates profit, and helps impoverished countries – the â€Å"one-for-one† model. This model operates in a manner that provides a child in need with a free item when that same item is purchased in a first world country. This trend has been incredibly popular and has catapulted to prominence around the world: â€Å"more and moreShow MoreRelatedThe Effects Of Low Income Affects The Lifestyles Of Minimum Wage Essay1450 Words   |  6 Pagesprescriptions. (Qin Chernew, 2014) The current minimum wage level compared to the poverty threshold, is not sufficient to support minimum wage earners and their families. This is a phenomenon that has been lingering for decades, due to changes in the economy. Additionally, over the past five decades, the federal government has attempted to combat poverty across the country; however, this battle is still ongoing today. (HHS, 2016) In 2015, the Census Bureau conducted a government assistance programRead MoreThe Millennium Development Goals Been A Success? Essay1507 Words   |  7 PagesDevelopment Goals been a success? Student Number: 1546031 Word Count: 1488 Words In the year 2000, at the Millennium Summit of the United Nations every member state of the UN at the time agreed to help in achieving eight goals that targeted areas such as poverty, education, gender equality, disease and more. Each goal had its own specific targets as well as dates for achieving those targets. Since many of the goals expire on December 31, 2015 (McArthur, 2013) it has come up inRead MoreWhat Was The Cold War?1726 Words   |  7 Pagesafter the Vietnam War and ending a few years later. Nor did the Cold War only involve the United States and the Soviet Union. The Cold War was an ongoing fight between the United States of America and Communism. The United States believed that Communism was wrong and that is should be stamped out wherever found. Relations with the Soviet Union had been uneasy for some time. Joseph Stalin released a provocative statement in 1946, stating that international peace was impossible â€Å"under the present capitalistRead MoreSlavery And The Worst Violations Of Human Rights Essay1984 Words   |  8 PagesSlavery is undeniably one of the worst violations of human rights. Slaves are denied of their basic rights, and forced to labor in the worst of condition with little to no pay. Slavery goes against the majority of articles in the Universal Declaration of Human Rights’ articles but most notably the forth article that specifically prohibits slavery and servitude, but also the first couple of articles that clearly state that all human beings are born free and equal, and are entitled to those rightsRead MoreI ndian Joe, Lightfoot Gonzales, And Narisco Allalha1563 Words   |  7 Pagesmembers of the Choctaw tribe attempted the arduous journey to Indian Territory, it is estimated that anywhere from 2,500–6,000 Choctaw died along the way causing a Choctaw chief to call it the trail of tears and death. This tragedy has not been forgotten by modern Choctaw and has become a defining moment in their culture. Joe Lightfoot references the Trail of Tears several times throughout Indian Joe and specifically remarks on his cultural loss when driving to Liz’s home saying, â€Å"the Trail of Tears rightRead MoreRhetorical Analysis Of Jfk Inaugural Address1426 Words   |  6 Pagesgathered before him as well, directing it to people around the world. He attempted to inspire the nation by calling on his fellow Americans to work together in not only the pursuit of progress and the elimination of poverty, but also in the battle to win the ongoing Cold War against communism around the wor ld ( Staff)and his hope for peace in the nuclear age. In addition to his message, he recognized that captivating his audience required a powerful delivery. This was shown during theRead MoreThe Crime Of Organized Crime1649 Words   |  7 PagesWhen I hear the term organized crime, I associate it with â€Å"The Mafia†, â€Å"Scarface†, and â€Å"Cartels†. Organized crime can be defined in a variety of ways. It is an ongoing criminal enterprise that is wisely working to generate profit engaging in illegal activities depending on demand, where its presence is preserve through force, intimidations, and corruption. According to the FBI, organized crime is basically a group of transnational, national, or local alliances of highly centralized enterprises runRead MoreCritical Analysis of the Challenges Faced by Au in Achieving Continental Unity2727 Words   |  11 Pagesinternational consensus in support of the liberation struggle and the fight against apar theid , it lacked the power and muscle to fight a decisive battle hence the formation of the AU. The AU which is Africa’s new political Union is hoped to foster prosperity and democracy through social, economic and regional integration. The AU is meant to be more radical than its predecessor. Its charter makes provision for intervention, against a member state’s wishes, â€Å"in respect of grave circumstances† . The AU charterRead MoreYouth Gangs2071 Words   |  9 PagesJimmie Simpson University of Phoenix Although some may argue that gang activity and youth involvement has grown exponentially through the years, it has been an ongoing epidemic for decades. Methods, levels of violence, rules, and motivations may have changed over the years, but the basic infrastructure has remained the same. The earliest accounts of youth involvement in gangs first appeared in Europe or Mexico, while the earliest record of youth gangs appearing in the United StatesRead MoreSouth Africa s Political, Economic, Legal, Cultural, And Commercial Aspects Of Doing Business With South1810 Words   |  8 Pagesn.d.). There are many issues still today that threaten South Africa’s political stability, some of which are long standing, and some of which have become more imperative in recent times. South Africa’s has several weak spots in its political system that could disrupt the relative steadiness that has prevailed in recent times. South Africa continues to face the legacy of apartheid in that there is a disproportionate influence over financial and business affairs. The whites of the country (9.6% of the

Facilitating Reef Tourism Management †Free Samples to Students

Question: Discuss about the Facilitating Reef Tourism Management. Answer: Introduction The Great Barrier Reef is considered to be Australias top tourism attraction and its subsumed under the World-Heritage list for being the largest coral reef ecosystem in the world. The reef spans for more than 2,300 kilometres beginning from the northernmost part of Queensland the southern part of the coastal town in Bundaberg ( 2018). The WhitSunday Islands are known for its group of islands located in the heart of Queensland, Australia. My aim is to establish an eco-tourism business that would provide attractive package for the teeming visitors. For the business initiative I would approach the Sydney Morning Herald as a communication and print partner. The Great Barrier Reef provides a spectacular view for tourists all over the world. Recently, the government of Australia has initiated a long-term plan for the sustainability of the Great Barrier Reef (Coghlan 2012). The Great Barrier Reef Marine Park covers 3444, 000 sq. km and comprises of 2,900 coral reefs, 300 coral cays, seagrass beds, 600 continental islands and numerous mangrove islands (Abascal, Fluker and Jiang 2016). All these makes the Great Barrier Reef Park, the ideal spot for embarking on a eco-tourism business. My entrepreneurial venture would be to provide an ecotourism package that would comprise of sightseeing of the WhitSunday Islands, glass-bottom-viewing, walks around the Great Barrier Marine Reef and snorkelling options. It has been found that more 80 per cent of the different activities related to tourism occurs in the Great Barrier Reef Marine Park (Spencer 2016). The motivation behind beginning with this business venture is to spread awareness about the impa ct of climate change on one of the most prized coral eco-systems in the world. The region has recorded a footfall of more than 2.4 million visitors that contributes to $3.1 billion to the economy of the country ( 2018). Given the low rate of employment in the region, the local tourists will incorporated in the business by acting guides for the visitors in educating about the Great Barrier Reef. The political environment of Australia is appropriate for the operation of eco-tourism primarily because Australia is not known for infiltration and conflict that may jeopardize the business. As has been discussed earlier that the Great Barrier Reef attracts tourists round the year, therefore, the economic environment for the growth of the business is quite promising (Great Barrier Reef 2018). The eco-tourism package would generate employment for the large number of unemployed people (Authority 2014). Modern technology and social media networks would be used extensively for the promotion and advertising. On the environmental aspect, there is threat due to the decline in the condition of the coral reef system. The ecotourism business will be promoted vigorously through the incorporation of a number of interesting package like the family package or special package for the honeymoon couple. During occasions on the National Day, Valentines Day and Christmas there will be attractive offer s that would attract more visitors. I will request the Australian government to help us in spreading the eco-tourism message of the business. Conclusion Ecotourism is an emerging tourism opportunity and keeping in mind the diversity of flora, fauna and natural endowments, I expect the business to do well. I would continuously make endeavours to thrive the interest about my business prospect by adopting innovative approach. I intend to advertise on television by incorporating the local celebrities and seek the support of the Australian Tourism ministry. References Abascal, T.E., Fluker, M. and Jiang, M., 2016. Domestic demand for Indigenous tourism in Australia: understanding intention to participate.Journal of Sustainable Tourism,24(8-9), pp.1350-1368. 2018.The Great Barrier Reef, Queensland - Tourism Australia. [online] Available at: [Accessed 7 Apr. 2018]. Authority, G.B.R.M.P., 2014. Great barrier reef outlook report 2014. Coghlan, A., 2012. Facilitating reef tourism management through an innovative importance-performance analysis method.Tourism Management,33(4), pp.767-775. Bunce, L., Economics, D.A., 2013. Economic contribution of the Great Barrier Reef. Great Barrier Reef. 2018.Experiences in the region - Great Barrier Reef. [online] Available at: [Accessed 7 Apr. 2018]. Spencer, Ashley, (2016.).Tourists Are Flocking to the Great Barrier Reef Because It .... [online] Available at: [Accessed 2018]. 2018.Educational Tourism | Tourism MoreTourism More. [online] Available at: [Accessed 12 Apr. 2018].

Monday, April 20, 2020

ONE Considerable Advantage That Arises From Philosophy, Consists In Th

ONE considerable advantage that arises from Philosophy, consists in the sovereign antidote which it affords to superstition and false religion. All other remedies against that pestilent distemper are vain, or at least uncertain. Plain good sense and the practice of the world, which alone serve most purposes of life, are here found ineffectual: History as well as daily experience furnish instances of men endowed with the {2} strongest capacity for business and affairs, who have all their lives crouched under slavery to the grossest superstition. Even gaiety and sweetness of temper, which infuse a balm into every other wound, afford no remedy to so virulent a poison; as we may particularly observe of the fair sex, who tho' commonly possest of their rich presents of nature, feel many of their joys blasted by this importunate intruder. But when found Philosophy has once gained possession of the mind, superstition is effectually excluded, and one may fairly affirm that her triumph over th is enemy is more complete than over most of the vices and imperfections incident to human nature. Love or anger, ambition or avarice, have their root in the temper and affection, which the soundest reason is scarce ever able fully to correct, but superstition being founded on false opinion, must immediately vanish when true philosophy has inspired juster sentiments of superior powers. The contest is here more equal between the distemper and the medicine, {3} and nothing can hinder the latter from proving effectual but its being false and sophisticated. IT will here be superfluous to magnify the merits of Philosophy by displaying the pernicious tendency of that vice of which it cures the human mind. ([editor's note] 1) The superstitious man says Tully2 is miserable in every scene, in every incident in life; even sleep itself, which banishes all other cares of unhappy mortals, affords to him matter of new terror; while he examines his dreams, and finds in those visions of the night prognostications of future calamities. I may add that tho' death alone can put a full period to his misery, he dares not fly to this refuge, but still prolongs a miserable existence from a vain fear left he offend his Maker, by using the power, with which that beneficent being has endowed him. The presents of God and nature are ravished from us by this {4} cruel enemy, and notwithstanding that one step would remove us from the regions of pain and sorrow, her menaces still chain us down to a hated being which she herself chiefly contributes to render misera ble. 'TIS observed by such as have been reduced by the calamities of life to the necessity of employing this fatal remedy, that if the unseasonable care of their friends deprive them of that species of Death which they proposed to themselves, they seldom venture upon any other, or can summon up so much resolution a second time as to execute their purpose. So great is our horror of death, that when it presents itself under any form, besides that to which a man has endeavoured to reconcile his imagination, it acquires new terrors and overcomes his feeble courage: But when the menaces of superstition are joined to this natural timidity, no wonder it quite deprives men of all power over their lives, since even many pleasures and enjoyments, {5} to which we are carried by a strong propensity, are torn from us by this inhuman tyrant. Let us here endeavour to restore men to their native liberty, by examining all the common arguments against Suicide, and shewing that that action may be free from every imputation of guilt or blame, according to the sentiments of all the antient philosophers. ([editor's note] 2) IF Suicide be criminal, it must be a transgression of our duty either to God, our neighbour, or ourselves. -- To prove that suicide is no transgression of our duty to God, the following considerations may perhaps suffice. In order to govern the material world, the almighty Creator has established general and immutable laws, by which all bodies, from the greatest planet to the smallest particle of matter, are maintained in their proper sphere and function. To govern the animal world, he has endowed all living

Sunday, March 15, 2020

The Dog That Will Not Die!

The Dog That Will Not Die! Free Online Research Papers In this world there are several things I dislike, but most of all I dislike my roommate’s dog. He drives me crazy. I have several reasons not to like this dog; it is old and grumpy, it stinks, and it thinks it can sleep on anything in the house. There are so many more reasons for me not to like this animal. I ask myself everyday why will this dog not die or just go somewhere else and stay out of my life. First off, this dog isn’t a cute little puppy; it’s an eight year old Chihuahua from the depths of hell. His owner, Brooklyn, named him Simon for some reason, but I call him Satin. He has this hideous tan fur that is turning white like an elderly man and huge, bulging eyes that look in separate directions. This animal is so grumpy, every time we have company over it attacks them like they are an escaped prisoner being attacked by the k9 unit. Brooklyn says he is so aggressive because of all the medications he is on. I disagree, I think he is just stupid and doesn’t realize what he is doing. Every time I hear this dog bark, which is anytime anyone moves, I clinch my fists and mumble profanity under my breath. If animal cruelty wasn’t a crime I would beat this animal until he obeyed, which I doubt will ever happen with that dog. Another thing that bothers me about this dog is its horrible dog odor. This creature smells like it sleeps on road kill. He goes to the groomer all the time, but it obviously does no good. Everything this dog sits on stinks. He also sheds his fur on our furniture. It drives me crazy. I hate getting it on my clothes when I sit down. I just don’t understand why he can’t stay outside like all animals should. My parents didn’t allow animals in our house back home, so I’m not used this. This dog obviously isn’t fit for being a house dog. I’m surprised he doesn’t use the bathroom on the floors. He does everything else wrong so why not? His owner thinks he is so perfect. I tell her everyday how much I just want to punt it out side. Lastly, this beast thinks he owns the house. Last time I checked he wasn’t paying any rent. He gets mad if anyone walks by his bed, sits close to him, or even makes a loud sound. He acts like this is his territory and everyone else are intruders. I cannot even have company over without locking him in his room. It makes me so angry. I feel like I’m not welcomed in my own house because I get attacked every time I come home. This dog’s behavior is so ridiculous. It is pretty bad when you want to move to get away from a dog. In conclusion, this dog drives me insane. I cannot stress enough how this dog makes me feel. It stinks up our house, attacks everyone and just ruins my day. It’s not like I’m an animal hater or I haven’t tried to make things better. I’ve had many talks with my roommate, but it is no use. She always has an excuse for its behavior. I’ve given up on trying to make peace with this dog. I guess I will never be able to enjoy living on my own while he’s around. I doubt he will live much long, but right now it seems like he will never die. Research Papers on The Dog That Will Not Die!Comparison: Letter from Birmingham and CritoThe Spring and AutumnUnreasonable Searches and SeizuresHarry Potter and the Deathly Hallows EssayPersonal Experience with Teen PregnancyCapital PunishmentThe Masque of the Red Death Room meaningsHip-Hop is ArtGenetic EngineeringThe Hockey Game

Friday, February 28, 2020

Race and ethnicity Essay Example | Topics and Well Written Essays - 2750 words - 1

Race and ethnicity - Essay Example The identity based on environmental, cultural or historical diversity should have no effect on the fact that human beings can and may live differently. All peoples of the world possess equal faculties and can attain the highest levels of intellectual, technical, social, cultural, economical and political development. The difference between the achievements of the people are entirely attributed to geographical, historic, political, economic, social and cultural factors and by no means should form the basis of rank-ordered or classification of peoples of different races. All human groups no matter what their ethnic origin contribute according to their own genius towards the progress of civilization and culture. Racism and racial prejudice have afflicted the world in ever-changing form. By continuing legislative provisions and administrative practices which are contrary to the principles of human rights, contempt and injustice continues to prevail for certain individuals and groups in a society. An understanding of the racial issue facing America needs to be viewed in a historical context. The African Americans arrived as slaves, shackled in chains and their social status was defined by their captivity. They were regarded as beings of inferior order and altogether unfit to associate with the white race, either socially or politically. They were deprived of the rights the white man was bound to enjoy and were considered by some as lawful to reduce them to slavery for their benefit. The criteria by which the social worthiness of individuals is judged and discriminations made are class, caste and the cultural history i.e. the legacy of slavery on race relations as in the case of blacks. The ways in which inequality is institutionalized or the ways by which the socially defined categories of person are rewarded unequally for their social contribution, is by ignoring the talents and abilities of individuals. The targeting and mistreatment of ethnic minorities has been a recurrent theme in the history of the modern world. The ethnic cleansing practiced by the Serbians in Bosnia is a recent example and the systematic massacre of the Jews by the Nazis in the Second World War even to this day, is considered a heinous crime by the whole world. Even some European countries have demonstrated very high levels of intolerance, especially towards immigrants of color who have entered their workforce in recent decades. The society we all live in, is an organic system in which various components work together to contribute to the health of the whole system and some of these systems are more important for the survival of the system as compared to others. Functionalism relies on the metaphor that society is a body or a living system. (Rigney 2001, p. 17) Just as a human organism consists of many parts like the brain, heart, kidneys and lungs etc. which work together for the survival of a person, in the same way the society also consists of multiple cooperative components. Functional analysis proceeds not by examining the details of specific interaction but by looking at the society as