Understanding Consumer Behaviour and Mitigating Risks in Cryptocurrency Buying Process

This report explores the meaning of consumer buying behaviour and the micro and macro dimensions of consumer behaviour. It identifies the risks involved in using cryptocurrencies and discusses strategies for buyers to mitigate these risks in the buying process. The report also references specific theories in economics to explain the multi-faceted nature of consumer buying behaviour in cryptocurrencies.

Consumer Behaviour

TABLE OF CONTENT
INTRODUCTION...........................................................................................................................3
MAIN BODY...................................................................................................................................3
1. Referencing to the specific theory in the research of economics explaining the multi-faceted
nature of consumer buying behaviour of cryptocurrencies uses..................................................3
2a. Identifying the consumer risk involved in cryptocurrencies uses..........................................4
2b. Discussing how cryptocurrency buyers could mitigate risk in consumer buying process....4
CONCLUSION................................................................................................................................5
REFERENCES................................................................................................................................6

INTRODUCTION
Consumer behaviour is the study of the various groups, individuals or organization and
all other activities which are related with the purchase, use and disposal of gods and services.
This report will outline meaning of consumer buying behaviour and the micro and macro
dimensions of consumer behaviour. Further it will outline the risk involved in the
cryptocurrencies and how buyers mitigate the risk in consumer buying process.
MAIN BODY
1. Referencing to the specific theory in the research of economics explaining the multi-faceted
nature of consumer buying behaviour of cryptocurrencies uses
Consumer buying behaviour refers to the actions taken by the consumers in order to buy
the products and services. It is very important for the businesses to understand this process as it
helps the owner to produce those products which are accepted by the customers (Qalati and et.al.,
2019). This process includes the customers buying the products online by engaging in the social
media.
Micro and macro dimensions of consumer behaviour
Motivation: The consumer behaviour needs the motivation in order to survive in the
market. The customers can motivated by earning the profit from investing in the cryptocurrency.
This makes the customers to invest more in order to earn more profit.
Perceptions: The consumer perception is so important because it makes the owner to
know about the feedback and perception of the customers. It helps in understanding the
customers communication and their buying decisions by knowing their. Before implementing
anything new the owner must know about customer perceptions as it used to know about the
profitability in the market.
Technological factor: As changes in the technology it has great impact on the buying
behaviour of the customers. Blockchain is the technology tool which maintains the safety in
order to record and transfer the information.
The consumer behaviour have to be focused because customers are the main in order to
invest in the crypto market. They must be getting the adequate profit in investing in this market
which motivates them in order to invest more.

2a. Identifying the consumer risk involved in cryptocurrencies uses
Consumer risk are the risk which is potential risk found in all consumer-oriented
products. It is because the consumers are not meeting the quality standards as they want from the
market (Layaq and et.al., 2019). The risk involved in using the cryptocurrencies is that fraud
practices which are highly involved in the crypto exchange market. The lack of stability and
consumer protection makes the crypto user at the risk.
Model/Theory of risk
Risk theory involves the decisions taken by the people make when they have faced with
the uncertainty about the future. There are many types of risk theories followed in the market
that are financial theory, agency theory, stakeholder theory and new institutional economics.
In order to use the cryptocurrency the customer must be prepared to face the financial
risk which is involved in this exchange market.
The FCA has become the anti-money laundering and counter-terrorist financing
supervisor in the United kingdom. They have issued some consumer warnings that investing in
the crypto assets and currency is having high risk and the investor be prepared in order to meet
the financial loss to them.
2b. Discussing how cryptocurrency buyers could mitigate risk in consumer buying process
The consumer buying process is the important steps which the consumer takes in
purchasing anything from the market. There are five stages in the consumer buying process
which are as follows:
1. Identify the Problem- The customer will only buy that product if he or she has
need or desire of that product. They must need to identify the problem in order to
but the products and services from the market (5 Stages of Consumer Buying
Behaviour, 2021). If the customers are interested in crypto than only they should
identify for this.
2. Information Search- After identify the product the customer will search on that
product in order to get the best products from the market. The customer will
invest in that exchange market where they will be getting good and high returns.
3. Evaluate the alternatives- Customers will find many choices after getting
information of that product. They will evaluate the every information for the
product he needs or desire to buy.

4. Purchase decision- At this stage consumer will find the most appropriate market
in which he has to invest in order to earn the good profit.
5. Post-Purchase Evaluation: In this, customer check whether they have invested at
the right place or not. This shows the satisfaction level of the customers in order
to buy those products and services from the market.
Risk mitigation is the process of reducing the risk by taking the proper actions which
makes the customers to come out from the risk in the future (Jessel and DiCaprio, 2018).
Strategies involved in order to reduce the risk in the consumer buying process are as follows:
Avoidance: The best way to avoid the risk is to exit the business or cancel the planned
projects. In order to avoid the risk the customer can have great policies in order to invest in the
crypto exchange market.
Acceptance: Before investing in the crypto market the customers must accept the risk
involved in the exchange market (Panwar and et.al., 2019). They must accept the financial risk
that they may face in the future.
Reduction or control: The customer can reduce or control the risk by mitigating with the
risk properly. If the risk is less than the customers can easily cope up with that risk in the
competitive market.
The risk identified is the financial risk and frauds related to the leaking of the information
of the information of the customers. They have issued some customer warnings in order to invest
in the crypto assets and currency is having high risk and the investor be prepared in order to have
loss.
CONCLUSION
From the above report it has evaluated the meaning of consumer buying behaviour and
described the micro and macro dimensions of consumer behaviour. At last, it has described the
risk involved in the cryptocurrencies and how buyers mitigate the risk in consumer buying
process.

REFERENCES
Books and Journals
Jessel, B. and DiCaprio, A., 2018. Can blockchain make trade finance more inclusive?. Journal
of Financial Transformation. 47. pp.35-50.
Layaq, M. W. and et.al., 2019. Blockchain technology as a risk mitigation tool in supply
chain. Int. J. Transp. Eng. Technol. 5(3). pp.50-59.
Panwar, D. and et.al., 2019. Consumer decision making process models and their applications to
market strategy. International Management Review. 15(1). pp.36-44.
Qalati, S. and et.al., 2019. Impact of Price on Customer Satisfaction; mediating role of Consumer
Buying Behaviour in Telecom Sector. International Journal of Research. 6(4). pp.150-
165.
Online
5 Stages of Consumer Buying Behaviour. 2021. [online]. Available through:
<https://clootrack.com/knowledge_base/stages-of-consumer-buying-behavior/>