Oppositional Product Names, Organizational Identities, and Product Appeal

Abstract

At their core, markets are exchange structures between producers and consumers, and products are a key element that connects them together. Many new markets emerge in direct ideological opposition to incumbent industries. Yet, the ways in which ideology affects products in oppositional markets are not well understood. We propose that when audiences cannot easily differentiate between products based on physical attributes, they rely on ideological discourse about the production process. We argue that product names, by embodying linguistically the narrative of this discourse, shape the appeal of oppositional products to customers. When products have names that are congruent with the collective identity of an oppositional market, they have higher appeal. This beneficial effect is attenuated (1) when audience expectations about what type of product should have an oppositional name are violated and (2) when a firm develops a strong organizational identity and audiences rely on this identity to make inference about the firm’s production process. We find support for this theorizing in the longitudinal analyses of product appeal in the U.S. craft beer industry, 1996–2012.

An identity perspective on coopetition in the craft beer industry

“…Therefore, we propose that in market categories united around an oppositional collective identity, organizations will view low‐quality collective members as greater threats to their business because they introduce the risk of “lowering the tide.” At the same time, organizations appear more likely to cooperate with those they perceive as high‐quality members of the collective, as they hold the potential to “raise the tide.” We theorize these coopetitive dynamics are driven, in part, by the oppositional category's desire to avoid becoming like those incumbents to which they are ideologically opposed. As oppositional markets differentiate themselves from incumbents through their underlying ideology about their products and the way in which they are made (Verhaal et al, ), we expect cooperation to persist among oppositional members who uphold their commitment to their ideological beliefs, such as quality.…”

“…Although prior research indicates cooperative interactions among competitors normally dissipate over time (Brandenburger & Nalebuff, ; Gnyawali & Park, ), this could be that prior studies focus on organizations cooperating purely to achieve financial objectives; whereas, oppositional markets possess belief systems that often value other key organizational features (e.g., being small‐scale, artisanal, high‐quality, authentic). Accordingly, oppositional members, with their non‐financial objectives (Verhaal et al, ), might continue cooperating because their primary aim is to further their belief system rather than optimize financial performance.…”

“…Oppositional collective identity is commonly rooted in notions of authenticity (i.e., being true to “who we are”), and offers differentiation from and protection against dominant “generalist” market categories (McKendrick & Hannan, ). Put differently, it reflects an identity shared among category members who are ideologically opposed to the dominant market logic of existing firms (Verhaal, Khessina, & Dobrev, ). It is the adherence to this set of beliefs, and the cohesion around an oppositional collective identity, that allows emergent oppositional market categories to challenge incumbents (King & Pearce, ).…”

“…It is the adherence to this set of beliefs, and the cohesion around an oppositional collective identity, that allows emergent oppositional market categories to challenge incumbents (King & Pearce, ). Whereas other emergent market categories might offer products objectively superior to existing products (e.g., how DVD replaced the VHS market), oppositional markets depend on their ideological and identity‐based differences to differentiate themselves from the incumbent market (Verhaal et al, , p. 1468). For example, the grass‐fed meat and dairy (Weber et al, ), energy (Sine, Haveman, & Tolbert, ), micro radio (Greve, Pozner, & Rao, ), and whisky (McKendrick & Hannan, ) categories emerged to provide an ideological alternative to the status quo.…”

“…This can enhance the “oppositional” nature of the collective identity and strengthen ties among in‐group members. Accordingly, in their quest to challenge incumbents, oppositional market categories take collective action (Verhaal et al, ).…”