Spoils from the Spoiled: Strategies for Entering Stigmatized Markets

• Published date: 01 November 2019
• Author: Eileen Fischer,Aurora Liu,Moren Lévesque,Angelique Slade Shantz
• Date: 01 November 2019
• DOI: http://doi.org/10.1111/joms.12339

Spoils from the Spoiled: Strategies for Entering

Stigmatized Markets

Angelique Slade Shantz, Eileen Fischer, Aurora Liu and

Moren Levesque

University of Alberta; York University, York University, York University

ABSTRACT Stigmatized markets are those where either the products/services, or the

consumers, or both, have been collectively, negatively stereotyped and devalued by one or

more stakeholder audiences in ways that discredit the overall market. Many stigmatized

markets exist, and many flourish, yet little systematic attention has focused on entry into such

markets. Our article addresses this gap by conceptualizing various strategies for entering

stigmatized markets. We further present propositions regarding the market-level factors that

can influence which of these strategies firms will choose to employ. The contributions include:

conceptually clarifying the nature of stigmatized markets; identifying additional types of entry

strategies relevant for entering stigmatized markets; theorizing the conditions under which

firms would choose one entry strategy over another; and opening up for consideration the

effects that market entry may have on stigmatized actors in targeted markets.

Keywords: conceptual framework, destigmatization, entry strategy, market entry, market

thickness, stigmatized market

INTRODUCTION

The extensive body of research on market entry has identified numerous factors that

affect whether and how a firm enters a market (Markman et al., 2016; Zachary et al.,

2015). Frequently investigated characteristics include a market’s geographic distance

from the potential entrant (e.g., Meyer and Nguyen, 2005), the entrant’s technological

innovativeness (e.g., Helfat and Lieberman, 2002), its size relative to that of incumbents

(Markman and Waldron, 2014), and the nature of the market’s formal and informal

institutions (e.g., Schwens et al., 2011). One characteristic that has yet to attract

Address for reprints: Moren Levesque, Operations Management & Information Systems, Schulich School of

Business, York University, 4700 Keele Street, Toronto, Ontario M3J 1P3, Canada (mlevesque@schulich.

yorku.ca).

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C2018 John Wiley & Sons Ltd and Society for the Advancement of Management Studies

Journal of Management Studies

doi: 10.1111/joms.12339

56:7 November 2 019

concerted research attention, however, is whether and how a market is stigmatized and

how this affects market entry.

Stigmatized markets

[1]

can be defined as those where either the products/services

exchanged, or the consumers, or both, are negatively stereotyped and collectively deval-

ued by one or more stakeholder audiences in ways that discredit the market as a whole

(see Mirabito et al., 2016). Recent scholarship has identified a number of such stigma-

tized markets (e.g., Dioun, 2016; Durand and Vergne, 2015; Ellen and Bone, 2008;

Helms and Patterson, 2014; Hiatt and Carlos, 2015; Hudson and Okhuysen, 2009;

Humphreys, 2010; Scaraboto and Fischer, 2013; Tracey and Phillips, 2016; Vergne,

2012). Yet we lack a conceptual framework for understanding stigmatized markets and

the strategies that firms can consider and use if they decide to enter them. This gap is

significant because entering stigmatized markets entails challenges over and above those

associated with entering non-stigmatized markets. For example, firms entering stigma-

tized markets may risk contamination by association with the customers in those markets

(Hudson and Okhuysen, 2009; Scaraboto and Fischer, 2013), or may have difficulty

attracting customers who view the product as stigmatized (e.g., Dioun, 2016; Hum-

phreys, 2010). As another example, while entry into a stigmatized market may benefit

disenfranchised stakeholders such as stigmatized customers, it can meet with disfavour

among a firm’s dominant (Mitchell et al., 1997) stakeholders. These additional chal-

lenges faced by entrants into stigmatized markets suggest that scholars, managers, and

policymakers need to better understand the nature of stigmatized markets, the diverse

entry strategies, and the conditions that are likely to influence firms to choose one entry

strategy over another.

Accordingly, this article begins with a conceptualization of stigmatized markets and

then addresses two research questions: What strategies do firms use to enter stigmatized markets?

And what factors influence the strategies that firms select to enter stigmatized markets? In developing

answers to these questions, we draw on established theory and prior empirical research

to identify distinct types of entry strategies that firms use, and to develop propositions

regarding the factors that influence the choice of market-entry strategy.

Our research makes several important contributions. First, it helps to clarify concep-

tually the nature of stigmatized markets, differentiating them from stigmatized organiza-

tions and individuals. This contribution is significant because it helps to integrate

disparate studies that refer to or discuss but do not systematically map the construct of

stigmatized markets. It also helps develop a foundation for future research into the chal-

lenges that organizations face when entering and operating within stigmatized markets.

Second, our research extends the market entry literature by identifying strategies rele-

vant for firms considering entry into stigmatized markets, including stealth, leveraging

and disruptive strategies, and a series of corresponding tactics, which we define and illus-

trate below.

Third, we highlight a set of characteristics of stigmatized markets that we suggest

influence the strategies that market entrants choose. These characteristics include the

‘stickiness’ of the market stigma, which refers to the ease or difficulty of alleviating the

stigma from the stakeholders’ perspective; the pervasiveness of stigma across stakeholder

audiences, or the extent to which stakeholder audiences share the same views regarding

the market’s stigma; and market thickness, or the density and range of market

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Strategies for Entering Stigmatized Markets

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C2018 John Wiley & Sons Ltd and Society for the Advancement of Management Studies