The manufacturers aren't trying to segment the market. They are trying to claim shelf space. (The amount of Colgate they sell is proportional to the shelf spa

The manufacturers aren't trying to segment the market. They are trying to claim shelf space. (The amount of Colgate they sell is proportional to the shelf space the store offers them, which is proportional to the number of varieties they offer.) If Colgate had only one variety and Crest had ten varieties, then Crest would get that much more shelf space and vastly outsell Colgate. Grocery stores also like to offer their customers the illusion of choice, while dealing with as few distributors as possible. This simplifies their logistics. They would prefer to sell ten varieties of Colgate and Crest than ten separate brands of toothpaste. It gets ridiculous when you see half an aisle of Wheat Thins (original, whole wheat, low salt, spicy, plus the store clone brand of each of those). But I suppose the nice consequence is that small corner markets can have just as good a selection, effectively, as huge superstores.