Socio-Cognitive Dynamics in a Product Market
University of Illinois Dept. of Business Admin. Working Paper No. 99-0106
Posted: 4 Oct 1999
Date Written: April 1999
This paper explores the origins and evolution of product markets from a socio-cognitive perspective. Product markets are defined as socially-constructed knowledge structures (i.e., product conceptual systems) that are shared among produces and consumers--sharing that allows consumers and producers to interact in the market. Our fundamental thesis is that product markets are neither imposed nor orchestrated by producers or consumers, but evolve from producer-consumer interaction feedback effects. Starting as unstable, incomplete, and disjointed conceptual systems held by market actors--which are revealed in the cacophony of uses, claims, and product standards that characterize emerging product markets--we propose that product markets become coherent as a result of consumers and producers making sense of one another's behaviors. We further argue that the sensemaking process is revealed in the stories that consumer magazines and producers tell one another in published media, such as industry newspapers and consumer magazines, which we use as date sources. Specific hypothesis pertaining to the use of product category labels in published sources and the acceptability of different product category members throughout the development process are tested for the minivan market between 1982 and 1988. Our findings suggest that category labels for emerging and pre-existing categories. Our findings also show that as stabilization occurred around a category prototype, the acceptability of particular models changed without any physical changes to the models.
JEL Classification: L21
Suggested Citation: Suggested Citation