How did stories become literature?

Most often, the answer to this throughout history has been related to writing materials and literate individuals becoming available. When a society does not have many (or any, in some cases) citizens who know how to write and read, then they tend to keep their stories and traditions passed around by Word of mouth. When people begin to learn to read and write and material for writing on becomes available, however, then popular stories start to be written down and preserved as "literature".