Dying to Understand How Electronic Word of Mouth Legitimates Sustainable Innovations in Stigmatized Markets

Abstract

Entrepreneurs entering stigmatized markets face barriers to entry beyond those encountered in traditional markets. Yet, little research examines factors influencing the diffusion of these goods and services. Through the lens of institutional theory, this paper proposes and demonstrates the application of a conceptual model outlining the process by which stigmatized innovations become (de-)institutionalized. We combine mixed methods by blending qualitative with quantitative tools to analyze the legitimating influence of electronic word-of-mouth (eWOM) over time. Our findings suggest that dichotomized consumer preferences stem from normative (natural and benevolent versus artificial and malevolent), cultural-cognitive (ecological health and sustainable services versus public health and traditional services), and regulatory (government rule versus market rule) binaries that influence the deinstitutionalization of orthodoxy (utopian versus dystopian worldviews). Notwithstanding, we show that, in stigmatized markets, consumers look to eWOM to inform their choices, which can aid in deinstitutionalizing rational myths and help perpetuate service innovation. We also find that in stigmatized markets, the existing industry does not show a predictable response to societal pressures for service innovations that promote social wellbeing and sustainability.