Social Media Marketing Risk in Social Media Essay

Excerpt from Essay :

Social Media Marketing

Risk in Social Media Marketing

Role of Federal Government in Managing Cross Country Transactions

Regulation of Customer Transactions through Government Branches

Agency Relationship in Social Media Sites

Social Media marketing is increasing at fast pace and giving business organizations an opportunity to offer their products to diverse market located all over the world. Likewise, customers are getting unlimited product varieties to choose from according to their need and preference. There are certain risks associated with this business model and authorities should pay serious attention to address them.

Social Media Marketing

The dawn of 21st century has introduced many inventions in business organizations. These inventions have considerably changed the methods of conducting business activities and means of communicating with customers. As globalization is removing barriers and giant business organizations are emerging at regional levels, consumers are showing interest in the products offered by multinational and international organizations. How these products are marketed across the borders and how sell and purchase transactions are regulated is the topic of discussion in this paper.

It is interesting to mention that technological advancements have altogether changed the priorities of human beings in the spheres of indoor and outdoor activities related to entertainment, recreation and socialization. The creation of social media networks has provided the visitors with rich opportunity to interact with people located all over the world and get idea about their interests and preferences. As people are spending more time on Internet than visiting their social circle, they are tempted to perform many activities online. On the other hand, business organizations have made it further easy and online portals are available for almost every organization. Banks offer facility to carry out transaction using online application. Utility bills are paid online and there are uncountable business organizations which offer online shopping facility. The customer has to select an item and make payment through credit card or PayPal account. The good is delivered at his doorstep after defined lead time.

Keeping in view the opportunity to reduce cost to maintain physical outlet in many countries, organizations find it an easy solution to host a web application showing correct statistics of items in stock and inviting customers from all over the world. In addition to specific web applications run by the organizations themselves, there are generic web applications which are designed with the objective of promoting social media networking. These websites include,, etc.

This paper casts light upon in the perspective of its role in social media marketing.

Risk in Social Media Marketing

The biggest risk associated with social media marketing is of non-payment when the product is shipped and non-shipping when the payment is made. It means both buyers and sellers are risk takers when they enter into the contact of online trade. The other risks include shipment of item different from requested and item damaged in transit while shipper owns no responsibility. The best way to mitigate all these risks is to agree to everything in black and white so that disputes can be avoided at later stages.

Alternative Dispute Resolution Methods in Social Media Marketing

It goes without saying that there exist many disputes between the customers who opt for purchasing products marketed at social media websites. There are multiple reasons for existence of disputes.

1. Conflict of interest is the main reason behind occurrence of dispute between various stakeholders. As buyers want to get the product at low price while seller wants to sell it at high price, both often fall into dispute upon the price. There is the possibility that buyers assume that seller is charging undue because of his monopoly or control in the market.

2. Purchase transaction occurs when both buyer and seller agree to a price. In the case of e-commerce when customer has come across product specifications and features through social media networking site, there is high possibility that he has not seen the product in its physical form. The purchase transaction is made only on the basis of trust. It is quite possible that both buyer and seller have different perception about the quality and specification of the product. In this case, the probability of occurrence of conflict is high when buyer receives the products and finds it not according to his agreed specification. He may accuse the seller of cheating and claim his money back. On the other hand, the seller may blame the transportation company for handing over the wrong product or product damage in the transit. Both enter into dispute and it is different to resolve it.

The literature is rich in alternate dispute resolution (ADR) methods. Each one has its suitability and pros and cons. Listed below are the most common ADR techniques (Kerley et al. 2011).

1) Mediation

2) Arbitration

3) Negotiation

In the perspective of purchase transaction using social media networking platform, it is important to mention that all details are kept in black and white so that they can be referred to in case of an issue or confusion. There are many disputes which arise because of misunderstanding and when the terms and conditions are discussed in details, the issue is automatically resolved. Furthermore, buyer and seller are geographically dispersed as evident from the mode of purchase, i.e. online, the transaction is made on the basis of trust and buyer releases funds for payments. In this case, the use of mediator and negotiator may not be effective. There is serious need of an agent who knows all the details in black and white and is neutral to both the disputants. Hence, it is recommended that for genuine disputes arising between seller and buyer making transaction on social media platform, the services of arbitrator are hired.

Role of Federal Government in Managing Cross Country Transactions

In order to calculate balance of trade and net exports, federal government needs to keep an eye on transactions which are made across the borders. In social media marketing and sales, the record of these transactions must be provided to federal government for necessary inclusion in the national statistics. One method of regulating these trade activities is assumption that all items exported to other country are managed through ministry of trade whose office is present at national boundaries which serve as final checkpoint for scrutiny of exported and imported items. It goes without saying that any item passing the national boundaries is scanned and recorded in the register of national trade or Shipping Corporation. In many countries, this function is performed under the head of custom control. Both the importer and exporter have to provide the details of the object along with its purpose. Hence, the items transported to other countries in the head of trade are automatically included in the record of federal government.

However, an area of concern is related to identity of importer and exporter. As uncountable vendors are marketing their business through online platform of, and many of them can be small vendors, it is quite possible that their records are not completed with federal board of trade and taxation. Federal government needs to focus on this issue and define another head for these types of items in national statistics.

Regulation of Customer Transactions through Government Branches

Ministry of Industry & Commerce needs to play significant role in regulating customer transactions made through social media websites. However, there are certain cases in which it is difficult to determine that the item is actually traded and it not the gift to a friend located in another country. It is quite possible in the case when payment is not made using PayPal or other online account. Payment through bank is not the indication of trade as it can be for the purpose of supporting family of friend. There can be numerous other purposes which are…

Sources Used in Document:


Goodman, J. (2009). Strategic Customer Service. USA: AMACOM.

Kerley, P. et al. (2011). Civil Litigation. USA: Cengage Learning

Qin, Z. (2009). Introduction to E-Commerce. USA: Springer

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