Cultural fragmentation causes market fragmentation

Cultural fragmentation (which is typically caused by information abundance) leads to market fragmentation in an inverse U-shaped relationship:

• Little cultural fragmentation (i.e., monocultures) leads to quasi-monopolies. A single brand can dominate a huge segment of the market and easily become a landmark in its category/territory.
• Some cultural fragmentation (i.e., subcultures) leads to opportunity. New market segments open up, allowing more brands to enter the market while still gaining meaningful market share.
• Excessive cultural fragmentation (i.e., monocultures) destroys the market. If advertising works by cultural imprinting, cultural fragmentation prevents brands from gaining meaningful market share because they cannot align with any single market segment. This leads to a highly transactional consumer-brand relationship.

To an extent, brands can fight this trend by relying on personalization (often powered by AI) and showing up differently for each customer. However, this also reinforces the problem—see Personalization may be harmful and Cultural brands are bidirectional.

This is very similar to how Excessive cultural fragmentation causes social isolation, which partially explains the relationship between social bonding and commerce.

References

• [[brand-is-dead|Brand Is Dead]]