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Executive Summary
What makes a new industry successful? This research uses an analysis of the casino industry to examine the role of regulatory and cultural factors in the growth of new industries. Previous theories have suggested that markets are created by the creation of technological innovations that are seamlessly diffused among adopters. This research shows that the diffusion of innovations is not a process of seamless adoption but rather an institutional process that is affected in important ways by legal regulations, social norms, and cultural perceptions.

In an analysis of newspaper articles about casino gambling in the United States from 1980 to 2007, this research demonstrates that the growth of the casino industry was accompanied by increasing public associations between gambling and key frameworks of legal and cultural legitimacy. While the casino industry was at one time associated with crime and regulation, its recent growth was accompanied by increasing associations with business and entertainment. The results show that social and cultural factors have an important impact on market development. Managers working in new or evolving industries can strategically choose associations between their industry and key frameworks of legitimacy to appeal to multiple stakeholders, including investors, regulators, and consumers. To facilitate the coordination of multiple stakeholders, the author outlines several framing strategies that can be undertaken by managers to pursue legitimation.

The findings here can be used by managers to better understand legitimacy of their product, company, or market, whether nascent or well developed. Managers can facilitate legitimation through specific framing strategies, such as amplifying favorable aspects of the industry that already exist in people’s minds, extending the concept of their industry into another domain to appeal to multiple stakeholders, or bridging the existing industry or product concept to incorporate and, thus neutralize other potentially challenging frames.

Biography
Ashlee Humphreys is Assistant Professor of Integrated Marketing Communications in the Medill School of Journalism at Northwestern University. She received her PhD in Marketing from the Kellogg School of Management at Northwestern University. Her research uses a sociological perspective to examine core topics in marketing management and consumer behavior. Her current research interests include the role of institutions in markets, processes of coproduction, and the development of online communities.

Journal of Marketing, Volume 74, Number 2, March 2010
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