Scholars interested in culture and con- ferentiation of products is one of the main sumption have also focused on exchange mechanisms firms have to control competi- in markets.The sociology of consump- tion.This works in two ways.If firms can tion (Bourdieu 1984;Csikszentmihalyi choose in which part of the market they want Rochberg-Halton 1981;Slater 1997;Zelizer to compete,then they can go where their 1983,1994,1997;for review papers see competitors are not.Carroll (1985),calling Zelizer 2005,Zukin Smith Maguire 2004)this process niche partitioning,showed that focuses on what products mean for people and microbreweries were able to create a fast- how people use money and markets to estab- growing niche for themselves even as the lish meaning,status,and morality.For these largest brewing companies were steadily in- scholars,culture is deeply implicated in mar-creasing their hold over the brewing industry ket exchange.Products are cultural objects (Carroll Swaminathan 2000).White (1981) imbued with meaning based on shared under- has made a similar argument.Markets for him standings and are themselves symbols or rep-are reproducible role structures where firms resentations of these meanings.Consumption decide between the prices they want to charge reproduces the material lives of consumers for a good and the quality of that good they 2 and provides them means to express their produce.In making this decision,they decide identities and affiliations with status groups. which part of the market to be in. But most importantly for these scholars,the Leifer White(1987)demonstrated how meanings attached to products that are nego- this works for the frozen pizza market.White 5 tiated by consumers and producers shape the (2002)later identified this mechanism as a way 宝 interpersonal relations of embedded market to produce entirely new markets.If products exchange and,in turn,are shaped by them. become differentiated enough,then they are Although exchange characterizes the re-no longer competing.White's perspective can 尊 lation between buyer and seller in mar-easily be translated into the language of pop- kets,competition characterizes the relation ulation ecology.White is arguing that mar- between producers.5 Sociologists posit that kets would be differentiated by firms occupy- competitive markets confront producers as ing different positions in the niche,and,to problems to be solved,and they do so using the degree that firms were in fact not com- strategies of cooperation,combination,and peting,this could result in niche partitioning product differentiation.The degrees to which or,in White's language,the creation of new a market is competitive,to which producers markets. are allowed to cooperate,and to which pro-The differentiation of products can also ducers are allowed to combine,as well as how help the stability of the firm through spread- property rights are organized,are all regu-ing competitive pressures across multiple lated by the government.Although producers product markets.If firms decide to produce attempt to use a variety of strategies to con- multiple products,a downturn in a particular trol competition,government defines accept-market will not threaten the firm's existence able modes ofrelation between producers and because it is not totally resource dependent regulates competition through reacting to the on the exchange of one product.Population strategies firms employ. ecology noted this process,describing the Population ecology,network theory,and diversification tactic as a generalist strategy institutional theory all recognize that the dif- (Hannan Freeman 1977).Fligstein (1990) comes at this process from the point of view of institutional theory.He shows that prod- 6Relationships to competitors can be characterized in terms uct differentiation in U.S.corporations be- of resource dependence as well.In White's model,when firms signal their intentions to enter a different part of the gan as a marketing strategy in the 1920s that market,they are trying to control their interdependency. was pioneered by large firms to stabilize their www.annualreviews.org The Sociology of MarketsANRV316-SO33-06 ARI 24 May 2007 10:6 Scholars interested in culture and con￾sumption have also focused on exchange in markets. The sociology of consump￾tion (Bourdieu 1984; Csikszentmihalyi & Rochberg-Halton 1981; Slater 1997; Zelizer 1983, 1994, 1997; for review papers see Zelizer 2005, Zukin & Smith Maguire 2004) focuses on what products mean for people and how people use money and markets to estab￾lish meaning, status, and morality. For these scholars, culture is deeply implicated in mar￾ket exchange. Products are cultural objects imbued with meaning based on shared under￾standings and are themselves symbols or rep￾resentations of these meanings. Consumption reproduces the material lives of consumers and provides them means to express their identities and affiliations with status groups. But most importantly for these scholars, the meanings attached to products that are nego￾tiated by consumers and producers shape the interpersonal relations of embedded market exchange and, in turn, are shaped by them. Although exchange characterizes the re￾lation between buyer and seller in mar￾kets, competition characterizes the relation between producers.6 Sociologists posit that competitive markets confront producers as problems to be solved, and they do so using strategies of cooperation, combination, and product differentiation. The degrees to which a market is competitive, to which producers are allowed to cooperate, and to which pro￾ducers are allowed to combine, as well as how property rights are organized, are all regu￾lated by the government. Although producers attempt to use a variety of strategies to con￾trol competition, government defines accept￾able modes of relation between producers and regulates competition through reacting to the strategies firms employ. Population ecology, network theory, and institutional theory all recognize that the dif- 6Relationships to competitors can be characterized in terms of resource dependence as well. In White’s model, when firms signal their intentions to enter a different part of the market, they are trying to control their interdependency. ferentiation of products is one of the main mechanisms firms have to control competi￾tion. This works in two ways. If firms can choose in which part of the market they want to compete, then they can go where their competitors are not. Carroll (1985), calling this process niche partitioning, showed that microbreweries were able to create a fast￾growing niche for themselves even as the largest brewing companies were steadily in￾creasing their hold over the brewing industry (Carroll & Swaminathan 2000). White (1981) has made a similar argument. Markets for him are reproducible role structures where firms decide between the prices they want to charge for a good and the quality of that good they produce. In making this decision, they decide which part of the market to be in. Leifer & White (1987) demonstrated how this works for the frozen pizza market. White (2002) later identified this mechanism as a way to produce entirely new markets. If products become differentiated enough, then they are no longer competing. White’s perspective can easily be translated into the language of pop￾ulation ecology. White is arguing that mar￾kets would be differentiated by firms occupy￾ing different positions in the niche, and, to the degree that firms were in fact not com￾peting, this could result in niche partitioning or, in White’s language, the creation of new markets. The differentiation of products can also help the stability of the firm through spread￾ing competitive pressures across multiple product markets. If firms decide to produce multiple products, a downturn in a particular market will not threaten the firm’s existence because it is not totally resource dependent on the exchange of one product. Population ecology noted this process, describing the diversification tactic as a generalist strategy (Hannan & Freeman 1977). Fligstein (1990) comes at this process from the point of view of institutional theory. He shows that prod￾uct differentiation in U.S. corporations be￾gan as a marketing strategy in the 1920s that was pioneered by large firms to stabilize their www.annualreviews.org • The Sociology of Markets 115 Annu. Rev. Sociol. 2007.33:105-128. Downloaded from www.annualreviews.org Access provided by Shanghai Jiaotong University on 02/04/15. For personal use only