Cognitive Gap Between Producers and Consumers in the Process of New Product Market Formation (Column‪)‬

In this paper, I explored the factors influencing product market dynamics from the perspective of differing knowledge structures of producers and consumers. In the first part, I defined a product market as a socially constructed knowledge structures that are shared among market actors (Rosa et al. 1999). Then, I identified two factors that influence the formation of product markets: the competitive arena perceived by producers, and consumers' knowledge with regard to product classification. In the second section, I reviewed previous researches to understand the elements that influence these two factors. Previous research on consumers' perceptions of category structure imply that the boundaries of product markets are related to substitutability with regard to product usage. In contrast, from the producers' perspective, a shift in the competitive arena after the appearance of "the dominant design" of products has been pointed out as a factor influencing product market boundaries (Abernathy and Utterback, 1978).