Beyond Prototypes: Drivers of Market Categorization in Functional Foods and Nanotechnology

• DOI: http://doi.org/10.1111/joms.12164
• Author: Nina Granqvist,Tiina Ritvala
• Date: 01 March 2016
• Published date: 01 March 2016

Beyond Prototypes: Drivers of Market Categorization

in Functional Foods and Nanotechnology

Nina Granqvist and Tiina Ritvala

Aalto University

ABSTRACT We develop a nuanced understanding of what drives producers’ and audiences’

categorization activities throughout market category development. Prior research on market

categories assumes prototypical similarity to be the main or even only driver of categorization.

Drawing on a comparative, longitudinal case study of the market categories ‘functional foods’

and ‘nanotechnology’ in Finland, we find that evolving perceptions, knowledge, and goals also

impact categorization. Furthermore, our analysis uncovers that goal-based categorization is

characteristic for vital market categories, and the lack thereof may mark a waning interest and

category decline. Overall, while previous research stresses the role of clear boundaries and

knowledge bases for a viable category, we find that overly strict boundaries may constrain

category vitality and renewal.

Keywords: categorization, comparative study, functional foods, market category,

nanotechnology

INTRODUCTION

When [officials within] the EU discovered that it [nanotechnology] is a future field and one needs

to invest heavily in it, everybody started to interpret their work as nanotechnology because it gives

you research money and time. Then someone came up with the idea that nanotechnology is danger-

ous, and as a result everyone said that what we do is not nanotechnology. Vice President, con-

sumer products company

This quote illustrates that categorization is an evolving activity covering different

stages of market category development – a topic that very few studies have examined.

Market categories are defined as economic exchange structures among producers and

consumers that are agreed by these participants and various other audiences (Kennedy,

Address for reprints: Nina Granqvist, Aalto University, Department of Management, P.O. Box 21230,

00076 Aalto, Finland (nina.granqvist@aalto.fi).

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C2015 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies 53:2 March 2016

doi: 10.1111/joms.12164

2003; Navis and Glynn, 2010). Thus, they are negotiated and contextually embedded

socio-cognitive entities (Khaire and Wadhwani, 2010; Porac et al., 1989; Rosa et al.,

1999). Market categorization – the focus of this study – in turn, refers to ‘a cooperative

venture between organizations and their audiences, rooted in cultural understandings

and expectations’ (Glynn and Navis, 2013, p. 1125). Participants’ varying contexts and

interpretations therefore provide leeway for categorization activities (Glynn and Navis,

2013; Granqvist et al., 2013). Moreover, categorization is influenced by several drivers

from early to mature stages of market category development. Given this inherently

dynamic nature of market categories, it is surprising that the understanding on what

drives market participants’ acts of categorization remain fairly static.

Categorization at its core is about clustering together things and concepts that are in

some ways similar (Mervis and Rosch, 1981). Previous studies have explored mar ket cate-

gorization as being guided by prototypical similarity, this referring to individuals’ judg-

ments of how similar an object is to the most representative exemplar of a category, based

on its observable features (e.g., Hannan et al., 2007; McKendrick et al., 2003). While an

overwhelming majority of the research does not account for alternative drivers of categori-

zation, recent studies have begun to challenge the dominance of this so-called prototype

view. For example, Durand and Paolella (2013) discuss three approaches where assessing

similarity is but one. The others are knowledge-driven categorization, where actors’ prior

knowledge and expertise shape their evaluative schemas (also Rehder, 2003a,b; R ottman

et al., 2012), and a goal-based approach, where actors’ pre-conceived goals and grievances

influence their acts of categorization (also Barsalou, 1983; Fiske and Taylor, 2013). Simi-

larly, recent empirical studies explore categorization as a dynamic process, covering the

foundations for valuation (Khaire and Wadhwhani, 2010), variations in audiences’ per-

ceptions (Pontikes, 2012), category producers’ subjective interpretations of category mean-

ings and labels (Curchod et al. , 2014), and their opportunistic uses (Granqvist et al.,

2013). This body of research shows that actors’ understandings and goals are in constant

flux, therefore influencing how they might categorize offerings.

Studies on market categories, however, overlook what drives participants’ acts of cate-

gorization over time. Research on category emergence and growth suggests that catego-

rization activities tend to be both tentative and opportunistic (Aldrich and Fiol, 1994;

Granqvist et al., 2013; Navis and Glynn, 2010; Santos and Eisenhardt, 2009). Studies

addressing mature market categories, forming the vast majority, maintain that prototyp-

ical similarity and conformity drive categorization (Dobrev et al., 2006; Hannan et al.,

2007). This is a result of a categorical imperative, where deviations from established

expectations are sanctioned (Zuckerman, 1999). Declining market categories, again,

seem to be sites for opportunistic participation in multiple categories (Kovacs and

Hannan, 2010; Negro et al., 2011). Yet, due to the lack of longitudinal studies, we have

little understanding on why and how participants categorize offerings during different

stages of market category development (also Kennedy and Fiss, 2013). Neither do we

fully understand their roles and motivations. These issues may have fundamental impli-

cations for the vitality and persistence of the category. We set out to explore, what drives

market participants’ categorization activities during different stages of market category development?

Empirically, we study these drivers during the development of two science-based mar-

ket categories in Finland: the consumer-driven functional foods category (that is, foods

211Beyond Prototypes

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C2015 John Wiley & Sons Ltd and Society for the Advancement of Management Studies