LSBM301 Consumer Behaviour: Risk and Buying in Cryptocurrency Market

This case study delves into consumer behavior within the cryptocurrency market, examining the micro and macro dimensions influencing purchasing decisions. It applies the perceived risk theory to analyze various risks associated with cryptocurrencies, such as market volatility, money laundering, and investment scams. The study outlines the consumer buying process in the context of cryptocurrencies, from awareness to post-purchase behavior, and discusses risk mitigation strategies like estimating trade size, determining transaction profitability, and position sizing. It critically evaluates the effectiveness of each risk identified, including standard situations, credit risks, legal risks, and profit risks. The document provides a detailed analysis of how consumers can navigate the complexities and potential pitfalls of the cryptocurrency market. Desklib offers a range of solved assignments and past papers for students.

Consumer behaviour

Table of Contents
Introduction......................................................................................................................................3
consumer buying behaviour........................................................................................................3
Explain the micro and macro dimensions of consumer behaviour. ...........................................3
Elaborate on this by analysing how a theory from this field helps understanding of consumer
behaviour.....................................................................................................................................3
Define consumer risk to Analyse at least one model/ theory of risk..........................................3
Apply this theory to analyse the risk in cryptocurrency as a product/service.............................4
Define and describe the consumer buying process and apply to cryptocurrency consumers.....4
risk mitigation and its relevance to the consumer buying process..............................................4
Identify at least 3 strategies for consumer reducing risk in the consumer buying process ........5
Critical evaluation of the effectiveness of each risk identified...................................................5
Conclusion.......................................................................................................................................6
Reference.........................................................................................................................................7

Introduction
consumer buying behaviour
Consumer buying behaviour is the study of group, individuals and organisations that includes all
activities that are associated with purchase, usage and disposal of foods and services (Chen,
Zhang and Zhao, 2017). It consist of the way customer attitude, preferences and emotions are
affecting the buying behaviour. It emerged as a discipline of marketing.
Explain the micro and macro dimensions of consumer behaviour.
Micro dimension:
Micro dimension factors include:
customers: the type of customer base that a organisation attracts and behind the purchase. It
includes stability of demand, relative profitability and intensity of competition.
Suppliers: Suppliers of specific product may be high and posses a big influence on the
successful business. It includes key link of the delivery process (Izzati, 2020).
Macro environment dimension: it includes several factors that is affecting the business
functioning.
Demographic forces: It is associated with education level, age, country region. These variables
are affecting the business.
Technological factors: These factors are associated with skill and ability that are required to be
considered that includes automation, Internet connectivity and 3D technology.
Elaborate on this by analysing how a theory from this field helps understanding of consumer
behaviour
Theory of customer behaviour:
In context of customer behaviour there are few factors that may affect the purchasing behaviour.
Psychological: In crypto currency is related with perception, it is that is ability to develop
understand the information that is related with aspects of crypto currency.
Define consumer risk to Analyse at least one model/ theory of risk
Consumer risk is a potential risk that is associated with all customer oriented products. It is
related with product not able to meet the quality standards that may remain undetected through
the manufacture quality control system.

Apply this theory to analyse the risk in cryptocurrency as a product/service
In present report there is analysis of the perceive risk theory in order to develop a detailed
understanding of the way it is affecting the customer behaviour.
Crypto currency is regarded as the decentralised digital currency that is to be used for buying and
selling of products and services (Alshurideh, 2019) . Crypto can come in many different forms.
In case of theory of perceived risk it can be applied in the scenario where customers are facing
various risks that are related with highly volatile market. There is situation of money laundering,
fake investment scams, human trafficking, fake crypto exchanges, blackmailing scams.
Define and describe the consumer buying process and apply to cryptocurrency consumers
The purchase process is associated when customers are becoming aware of the needs. This
awareness is coming from internal source that may be hunger or external source that can be
marketing communication.
Awareness: Awareness of such needs further motivates the customer for search of information
about various options that are available for fulfilment of such needs. In crypto currency this
malformation can cone from commercial sources, personal sources, government sources or own
experience of customer.
Evaluation of options: After there is identification of options there is need to evaluate all the
option. In crypto currency customer evaluate each option by paying particular attention to all the
attributes that are considerer important.
Post purchase behaviour: after the purchase is done then customer relationship process starts.
As a satisfied customer is more likely to make another purchase and attract potential buyers.
After this organisational are willing to communicate with the customer to influence the level of
post purchase satisfaction & behaviour in the organisation (Manero, Rimiru and Otieno, 2018).
risk mitigation and its relevance to the consumer buying process
Crypto currency is growing at crazy pace. Risk management strategy is required for the purpose
of dealing with risks.
Risk per trade:
Profit risk: It is the location of initial stop loss after the entry is triggered. This level is
identification when trading methodology is sued by trader.
Credit risk: It is the probability of parties behind the crypto failing project failing to fulfilling
the due obligations.

Legal risk: legal risk is regarded as the probability of negative event that is occurring with
respect to regulatory rules.
Identify at least 3 strategies for consumer reducing risk in the consumer buying process
Estimating the size of trade: in case if crypto currency its becoming important to guide the
emotions. In this there can be focus of no more than 2 percent of entire deposit can be invested.
Determination of transaction profitability: It is important to identify the profitability of. Losing
may be part of the trading.
Position sizing: It is defined as the quantity of assets that may be brought or sold. It is directly
related with the risk per trade based on the parameter that position sizing is established. In
context of crypto currency it become important to notice the way leveraged market is offering
better opportunity to open a bigger position with small capital.
Critical evaluation of the effectiveness of each risk identified
Standard situation: It is a deal that may turn out to be unprofitable and target may loose money.
Credit risks: It is the risk mostly attributed to theft and frauds that are taking place can crypto
market. There have been hacking instances that lead 40$ million loss.
Legal risk: Example of legal risk when states of north Carolina issues a desist and cease order to
bit connect cryptocurrency exchange because of fraud.
Profit risk: The profit target is regarded as the areas when trader may take position of the
profits, in this there is identification of the asymmetrical risk reward ration where potential gains
have to be identified in advance.

Conclusion
It is concluded from the above mention aspects that there are various risk associated with
customer behaviour that is required to be dealt so that it can be managed with respect to
organisation functioning.

Reference
Books and journal
Chen, Q., Zhang, M. and Zhao, X., 2017. Analysing customer behaviour in mobile app
usage. Industrial Management & Data Systems.
Manero, K.M., Rimiru, R. and Otieno, C., 2018. Customer Behaviour Segmentation among
Mobile Service Providers in Kenya using K-Means Algorithm. International Journal of
Computer Science Issues (IJCSI), 15(5), pp.67-76.
Alshurideh, D.M., 2019. Do electronic loyalty programs still drive customer choice and repeat
purchase behaviour?. International Journal of Electronic Customer Relationship
Management, 12(1), pp.40-57.
Izzati, B.M., 2020. Analysis of customer behavior in mobile food ordering application using
UTAUT model (case study: GoFood application). International Journal of Innovation in
Enterprise System, 4(01), pp.23-34.