Market oversegmentation

market, economy, psychology

Is there a name for the tendency of larger widget producers to artificially oversegment their product lines? It is artificial, and it happens especially in consumer markets. Manufacturers generate brands and types of products so they can game their way into more store shelf space and overload consumers with endless permutations of a product where no two are exactly the same and thus hard to compare. It leads to product names such as “Series 5 NP535U3C”, which again it makes price comparisons difficult, because what exactly is the difference between “GP68HX 12VH-022NL” and “AG274QS”? It makes it possible to game the consumers’ expectations (is this a “good brand”? Even when the budget series has the same internals as the ill-regarded budget brand the widget manufacturer also owns?), which lets manufacturers convert reputation into cash.

All this for more control over the amount of profit.

Recently I’ve been in the market for some household appliances, and web forums are very useless for gathering intel. “Experts” will have internalized all the “reality” of the above marketing: brand Xs are always high end, brand Ys are always low-tier. How can you be sure in the actual reality of how widget manufacturers operate these days? Especially when so many brands come from the same manufacturer, often even the same plant? Can you ever say “brand Z is good”? I just don’t believe it, because where is the profit in ‘upholding’ a brand? That’s not how markets for these products operate? Right? What do you say when someone says “brand A kitchens are shite, buy brand B”, when you know and can easily observe all kitchen cabinets are produced in exactly the same way, they merely vary in board thickness?

Anecdotal evidence is worthless, because the variability of widgets is too high to be able to draw evident conclusions, and a solid index of anecdotes will be quickly monetized and manipulated in this day and age. Hard evidence is naturally scarce on the subject, but it hard to ignore consumer reports-like test or famous websites/youtubers/what-have-you for those with widget factories. What reason is there to assume such resources stay neutral; they don’t provide openness of their finances.

Another fun example from my recent life was the purchase of a table. Ostensibly sold by a ‘boutique’ shop, with a nice founders’ story on the website. Unfortunately quite remotely located. But they still offered free shipping, something usually only afforded and affordable by big box companies. Lo and behold, turns out shipping was handled by a big box furniture shop. Have I been conned? Well, not really, the table wasn’t for sale there, but still.

What psychological effect does this take advantage of? And what can we do to make people more aware?