Following White’s suggestion, we can treat markets as ‘induced role structures’ (White 1981a) or ‘self-reproducing social structures among specific cliques of firms and other actors who evolve roles from observations of each other’s behaviour (White 1981b: 518). In any market the firms differ from one another as far as their production volumes and cost-structures are concerned, but, equally importantly, their products’ ‘taste structures’ can also be ranked by quality. Aspers makes a distinction between a standard market and a status market in which the status orders between the firms in a market are relatively stable (2005: 19; 2007). The case of totally homogenous products (perfect competition), the quality of which does not differ, is quite exceptional. Normally any market consists of only a relatively small number of firms which have established and preserved their own product niches. They have relatively stable roles as producers of a particular good and their identities are based on their own and their competitors’ mutual expectations. Almost tautologically, then, any novelty or improvement stays within one and the same market as long as the firms relate to its production costs and relative quality or status as competitors and take it into account in their strategic considerations. Once this is not the case, a new market has been established and a real innovation has been born.
The establishment of a separate market for mini-vans is probably the most significant development in the recent history of the motor vehicle industry. Analysing this example, Rosa et al. (1999: 70) argue that the emergence of a new market is equal to the stabilization of the usage of a new product category label, in this historical case the mini-van as distinct from station wagons, cars, trucks, and so on. The establishment of the separate mini-van market by old, established car firms was typically preceded by ‘endogenous and exogenous disturbances’ that ‘give rise to novel experiences and perspectives on product usage and marketing’ (1999: 67). Both the producers and the consumers gradually came to regard the mini-van as a category distinct from other kinds of cars in the wider market. Rosa et al. also offer an interesting example of the important role of the mass media as gate-keepers, as the ‘institutional regulators’ (cf. Hirsch 1972: 654), in this case mainly motor journalists, in creating new product labels, categories and thereby innovations. In the well-established fashion markets such regulators, like professional fashion journalists and critics, are firmly institutionalized.
Product differentiation can take place gradually, or a new product can break with its ‘mother’ market more abruptly, but the end result is really what counts. Many great and far-reaching innovations started out as gradual improvements or changes in an old product or service, through gradual product differentiation or the merging of two or more old products.<sup>5</sup> In this way novelties can presumably expect to face less resistance. Even a new fashion can undoubtedly start its life through product differentiation. In fact, only fads never result from ‘natural’ product development or differentiation. They are, by definition, one-time creations which establish a totally isolated and short-lived market of their own. In these markets the first-comers play a decisive role and the number of competing firms is usually very limited, at least in the beginning. On the other hand, if the costs of product development are low and imitation easy, the market is open for new potential competitors. As soon as the latecomers have grasped the opportunity, it is too late, since the fad is no longer growing in popularity and the market is soon so saturated as to become totally extinguished.
Fads, Fashions and ‘Real’ Innovations
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