Question two

Similarities between the social trends and the other markets discussed in the module

Social trading is an online digital platform which makes use of some prescribed sites to make some interactions in the form of transactions. The parties ready to trade do some business online because the market is free most of the time. To begin with, social trading involves the formulation of short-term business plans on a small scale. It is done by small traders who may be interested in the market but may have limited time and education to engage in large scale trading. These people may plan to do it on a part-time basis hence earning some extra income which might help them in their upkeep. They bear similarities with the other market systems which are discussed in the module. This is shown in the way they start, the mode of operation, the capital needed to start and the way the business interacts with the environment during operation.

Just like the other markets, most social trends have low start-up costs. As a venture starts, the partners or entrepreneurs have much uncertainty about the progress of the business. This is possible because of the unpredictable economic climate that exists as well as the existing companies which have already established themselves. Most of these ventures mainly start as trial and error; hence the reason why they require little capital for the owners to prove themselves with time. The confidence they have with the market increases as time goes on based on the prevailing economic environment.

Diversification of risks is another commonality that the markets show the traders as they start the ventures. It is so unwise to put al the investment in one place due to the uncertainty of the business environment. One should always be prepared for all outcomes hence the need to spread the risks that are present in the prevailing economic angle. This happens because the high chances are with a very high probability of high returns if the economic climate is favorable. There is a need to have several strategy providers rather than relying on one provider who can fail at one point in time.

Social trading just like other markets has a performance benchmarking principle which is used to measure the performance. This performance benchmark acts as a standard measure of estimating the progress of what happens in these markets. This is based on the fact that the owners would wish to know how far they have gone since they started. The competition of the surrounding markets can be used to estimate the moves the market is moving as a benchmarking strategy. The outcome will be a progressive move since the market will know what to major in to match the competition of the other markets.

Both markets also have verification of results as a procedure used to measure the results. The investment used in both markets is decent time and finances which have been committed to them. This needs a good way of calculating if the set targets have been met. With this done, the markets can identify their strengths, weaknesses, threats, and opportunities that can be available now and in the future. The following trading period can be made better since the market will have learned from their past how they can make their venture better in the long run.

Since they are not such big ventures, the markets can save fees that can be used for administration and other functions. The traditional ways of maintaining and managing the business which requires enormous costs have been ruled out by the digital form of doing things which needs a social platform to operate. The fees are necessary for this is so little making it quite manageable since both markets can sustainably afford. No much investment is needed hence making it very cost effective in the long run.

Differences between social trends platforms and other markets

The other markets are based on content production which are physical products which might be tangible in nature. This provides an opportunity to touch the products, review it based on quality and then do some transaction. This is different from the social trends platform which usually is found on social media for total sales. This is generally done online where the prospective clients must have access to the offers before doing the operations. They have time to judge the products and then choose the ones that suit them rationally.

The social trends market makes use of websites and social networks where the existing customers and the potential ones have the opportunity to interact and do some transactions. Through social media interaction, the companies can increase their brand engagement hence making themselves known to new customers. These customers make their choices online after seeing the products they are supposed to purchase. On the other hand, the other markets are based on the physical interaction between the buyers and sellers who have the authenticity of physically meeting and doing business together. These people have a transaction motive of exchanging the products through physical means, something that brings much trust and confidence in each other.

The marketing of the products is done on the social sites and networks where the content about the products is made available to all the prospective customers. The information about the company brands and changes in the product characteristics is made available online. This is different from the other physical markets where the products are advertised orally with one on one interaction. This gives room for negotiations through bargaining which offers the customers an opportunity to have some price reduction as per the demands. It makes the small-scale customers find it possible to have some bargaining power which causes them to stick to the producers of physical markets.

Business promotions are done in social media through the online platform in social trends. This is one way in which social businesses can make use of the online platform to promote what they have. Through this, they can have more ventures for reaching the customer base which increases the extending through which their value is measured. They are backed up with the current technology which is a great asset to them. On the other hand, the other markets do their adverts orally through the actions they show on the market. This is an excellent platform for them to physically demonstrate the consumers what they have because of the proof of evidence. Any doubts concerning what is offered are cleared one on one. It is more efficient where the customers do not need to move from their premises too far distances which may not be convenient for them.

In the online social trend, the sellers and the consumers rarely have the opportunity to meet physically because everything is done online. The transactions purely depend on the conviction that the social media offers to the clients and the confidence the clients have on the products being sold. This is because all the transactions are done online and the only way through which changes can be affected is the online platform. The other market involves constant physical interaction of the buyers and sellers. The products are availed to the people on concrete terms which provides them with opportunities to make rational choices. This makes the consumers able to make their views known to the sellers on how they view the products. The response of the customers makes the sellers improve the quality if need be.

The credibility, trust, and loyalty of the customers in the social trends market is purely based on the way they view the products and the conviction they have on their preferences. This makes the social networks and platforms to be so much equipped with quality services because they will convince the customers that the products are the best. If this does not happen, there is a probability of the consumers shifting to have searched for quality products. The other markets purely depend on the physical manifestation of the consumers in the presence of the products. They converse with the seller directly as they do a physical examination of the products. They also make enquires concerning how the product can be used and if the price can change.