Barbering, beer, coffee, hand soaps, tattoos, and even ice cream. The craft movement is everywhere. Everything is becoming artisanal, boutique, custom, and handcrafted. How did we get there? How can firms take advantage of this?
This study explains how the development of markets towards greater concerns for aesthetics and craft—whether it be the search for the perfect espresso shot or the creation of a visually complex tattoo—results from interactions between craft and commercial firms.
For example, in the coffee market, craft firms innovate brewing recipes for specific coffee beans to perfect the taste of the coffee. Commercial firms create profitable and scalable products, such as sugary delights like the Pumpkin Spice Latte. Craft and commercial firms innovate and adapt each other’s innovations to their respective goal of aesthetic perfection or profit maximization. Commercial firm Dunkin’ has borrowed from craft firms and automated the production of ‘handcrafted’ coffee. Craft coffee shops have aesthetically elevated the pumpkin spice latte, using artisan syrup and curated spices that match the characteristics of a specific coffee bean.
Over time, innovations and adaptations between craft and commercial firms led to many new products and ways of making coffee and resulted in the expansion of craft in the market. Coffee is widely marketed as handcrafted, consumers have become connoisseurs, and baristas are artisans.
Access Classroom Lecture Slides
Dolbec, Pierre-Yann, Zeynep Arsel, and Aya Aboelenien (2022), “A Practice Perspective on Market Evolution: How Craft and Commercial Coffee Firms Expand Practices and Develop Markets,” Journal of Marketing, doi.org/10.1177/00222429221093624
How markets evolve is a perennial and important question in business. Building on a large qualitative dataset on the coffee market comprising primary and secondary interviews, archival data, and fieldwork, the authors introduce a novel theoretical mechanism—practice expansion—to explain how ongoing institutional complexity fosters market evolution. To theorize practice expansion, the authors combine institutional logics with resource partitioning and introduce a two-by-two typology of firms evolving in markets: craft vs. commercial and generalist vs. specialist. The authors’ analysis, grounded in this typology, identifies three mechanisms that explain practice expansion (elaboration, translation, and transformation). The authors then show how practice expansion contributes to market evolution by increasing product diversity, broadening skills and knowledge, and enriching the market meaning system. The novel theory introduced in this article contributes to extant work by theorizing market evolution as resulting from practice expansion, and by broadening our understanding of the types of firms and their interactions important to that evolution. The novel theory also points to important strategy implications for how different types of firms can contribute to and benefit from the identified evolutionary patterns and ongoing institutional complexity.
Special thanks to Demi Oba, Ph.D. candidate at Duke University, for support in working with authors on submissions to this program.
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