What has put the contemporary consumer marketplace into such a problematic state?

Perhaps the shortest route to a meaningful answer is actually via a rather whimsical hypothetical example. Consider the following scenario, which takes place in the aisle of your local supermarket:

Imagine that you are shopping for toothpaste.

At the far end of the display rack, beyond all the Crest, Aim, Aquafresh, Ultrabrite, and so forth, are a few tubes of a product called "Genie Miracle Mol-R-Scrub."  It is produced by the Big M Chemical Works of Erie, Pennsylvania.   Its main active ingredient is listed as "flatucylic aldehyde." The price is 17 cents per tube.

Would you buy this product?

If not, why not?

Certainly its image isn't appealing.  The product name sounds small-time and old-fashioned.  And whatever the active ingredient "flatucylic aldehyde" may be, it sounds more appropriate for cleaning whitewall tires or barbecue grills than teeth.  The Great Lakes Chemical Works is a company we've never heard of, and doesn't seem like the sort of firm we'd feel comfortable buying health care products from.  Finally, the extremely low price is more of a turn-off than an inducement to buy.

But consider this possibility:

What if the toothpaste were a new product developed by a husband-and-wife team, one of whom was a dental hygienist, and the other, a small-time distributor of specialty industrial chemicals? What if together, they realized they could formulate essentially the same thing that dentists use to clean teeth, only mild enough for daily use, and at a price far below that of name brand toothpastes?

The name of the product would certainly fit these circumstances.  (Check your Yellow Pages for a sampling of the names that small companies typically select for themselves and their wares.)

Likewise, the name of the active ingredient, "flatucylic aldehyde," although off-putting, could well be its proper chemical description.  How likely would a small company be to recognize and defuse the nomenclature problem by devising a more palatable yet scientific-sounding "trade name" for the chemical?  Is a mom-and-pop operation likely to come up with something as sophisticated as Retsyn—the trade name by which the manufacturers of Certs breath mints refer to their "active ingredient" (otherwise known as vegetable oil)?

As for the price, it is only to be expected that a small start-up company would charge less than a giant like Procter & Gamble. With the exception of "boutique" products, new companies have almost always charged less than established ones. How else could they hope to gain niches among the giants?

But in our hypothetical example, price, the most empirically "hard" factor in the marketplace equation (and historically, the main lever by which newer, more efficient businesses have been able to displace greedy or inefficient older ones) has become "softened" to the point where it is just one more aspect of a nebulous product image—and can become more of a disincentlve to buy the lower it gets. This is a serious anomaly.

However, it is not an entirely unaccountable one.

Consider the product we are dealing with.   Exactly what is toothpaste? Aside from stannous fluoride, what is it made of?   Is it essentially based on soap?  Pumice?  Completely synthetic materials? What?