4- Technological Change

Question 1

3 characteristics of market information regimes

Answer 1

1) Attention Focus: They provide a focus of attention for organizations within a particular field, guiding them on what to pay attention to.

2) Sensemaking: They help participants understand the market activities within their field, making sense of what is happening.

3) Socially and Politically Constructed: These regimes are shaped by social and political factors, leading to biases and assumptions that are often unquestioned.

Question 2

define market information regime

Answer 2

system in competitive fields where organizations gather, interpret, and distribute information about market activities.

Question 3

define field acc to anand and peterson

Answer 3

the organized and competitive environment in which actors like record labels, artists, and consumers operate

allows researchers to dissect power structures, relationships, and hierarcheis in the industyr.

Question 4

define billboard as an example of a market information regime

Answer 4

billboard was a panel of 200 sale outlets that surveys with nominal categories like top/ strong/ good sellers and compiles results into performance ranking.

the political tone of billboard was very objective, and they embodied neutrality.

Question 5

what happened in 1991 that changed the market information regime?

Answer 5

the founding of soundscan

Question 6

what’s soundscan?

Answer 6

a sales tracking system used in the music industry
electronically monitors music sales from retail outlets and online platforms
provides accurate and real time data

Question 7

what were the concerns raised about soundscan?

Answer 7

the chart would be too volatile
smaller labels, new artissts, and records in the lower half woudl suffer
Realization that the new chart couldn’t be manipulated like the old one.

Question 8

how did soundscan affect independent labels? why?

Answer 8

Sound scan did reduce the chances of independent label albums appearing on charts.

Because: previously, independent label promoters could manipulate sales figures to influence Billboard’s charts, but SoundScan’s introduction, which tracked actual sales data, made this manipulation impossible

Question 9

how did the measurement focus change with soundscan?

Answer 9

Emphasis on “Unit Sales” for accurate evaluation, replacing the earlier focus on “Chart Position.”

Question 10

how did soundscan change the consolidation of industry control?

Answer 10

Previously, only large companies had costly data access, but SoundScan democratized information.

Question 11

how did soundscan affect market segmentation?

Answer 11

Since soundscan collected data about the whole market, rather than a predefined list, it became easier to identify new niche market opportunities

Question 12

define the blockbuster strategy

Answer 12

the focus on creating extremely popular and profitable products or services.

Question 13

how did the blockbuster strategy work offline?

Answer 13

there’s limited space of shelves, therefore retailers need to make selection decisions.
having a few hits compensates for the losses of many flops

Question 14

is the blockbuster strategy still applicable in the online world where there’s infinite shelf space? what are the two main stances on this?

Answer 14

YES according to the superstar theory
NO according to the long tail theory

Question 15

explain why superstar theory thinks blockbuster strategy is still applicable in the online world?

Answer 15

Exceptional products by highly talented individuals still captivate consumers.
People tend to follow trends and popular choices, we’re social creatures

Question 16

explain why long tail theory thinks blockbuster strategy is NOT applicable to the online world?

Answer 16

Online platforms empower consumers to find products tailored to their unique tastes.
Consumer demand is diversifying, challenging the dominance of generic hits.

Question 17

what does the long tail theory describe?

Answer 17

it describes the shift in consumer behavior and market dynamics due to digital platforms and online retail.

Question 18

describe the long tail distribution

Answer 18

the demand curve is flatter
- a vast array of niche products (the tail) collectively have significant sales

Question 19

according to the long tail theory, why did a shift occur? (3)

Answer 19

1) infinite shelf space online
2) consumers seek niche things
3) reduced costs per unit which means ncihe things can be economically viable

Question 20

compare the distrbution curves of long tail, and blockbusters

Answer 20

In blockusters, there’s a small number of blockbuster products forming the head of the distribution curve. in these markets, the few top items (head) dominate sales).

In the long tail, the distribution is longer yet flatter. there’s a vast array of niche products that form the tail of the curve.

Question 21

McPhee’s Theory of Exposure-

Answer 21

increased exposure leads to familiarity, which often results in a more positive evaluation of the product or concept.

Question 22

theory of exposure -> Double Jeopardy

Answer 22

Niche products lack extensive exposure, making them less familiar.
Heavy users explore niche goods but lack familiarity, impacting their preference for these products compared to hits.

Question 23

define collective social dynamics

Answer 23

how people’s decisions and behaviors are influenced by the actions and opinions of others in online communities, shaping trends and outcomes in cultural markets.

Question 24

components of collective social dynamics

Answer 24

1) popularity as a quality signal- due to an overwhelming amount of products people use popularity as an indicator
2) coordinated choices by community bonds
3) unstable preferences due to social construction

Question 25

information cascasdes

Answer 25

people adopt behaviors after observing others, leading to widespred collective actions influenced by social influence.

Question 26

Observational learning (individual) can lead to information cascades (collective level)

Answer 26

Individuals learn from others’ choices online (observational learning), leading to widespread adoption of specific products or behaviors (information cascades). This happens because people trust popular choices as indicators of quality, quickly spreading trends and shaping cultural markets.

Question 27

explain the experimental design of
Web-based experiments for studying collective social dynamics (Salganik & Watts)

Answer 27

In the first experiment, participants were presented with songs in a random order. Their choices in this scenario reflected a diverse range of individual tastes and judgments.

However, in the second experiment, where songs were presented in order of popularity, participants tended to select songs based on their perceived popularity, showcasing a trend-following pattern among the participants.

Question 28

what conclusion is derived from this experiment?

Answer 28

Conclusion~ Conformity Effect: This experiment highlighted how social cues and popularity can shape people’s decisions, indicating a conformity effect in the choices made.

Question 29

implications of this experiment for cultural markets

Answer 29

• pre market testing is crucial to identify failures
• institutions that create social awareness about others behaivours are important