The Physics of Marketing – Ideal Gas Law

If you have ever climbed up a mountain, you know that it is much colder at the top than at the bottom. Have you ever wondered why? Well it is because the atmospheric pressure is much lower than if you were at sea level. There is simply less atmosphere above you.

This relationship between pressure, volume, and temperature is described the ideal gas law, and it was formally discovered in 1834 by French Physicist Emil Clapeyron. It states if you heat a gas, it will expand, increasing pressure. Also, if you compress a gas, it will increase the pressure.

So how do we apply this to marketing?

I view this law as analogous to “sale pricing.” Think of Kohl’s – a company that is big on sale pricing. If you visit Kohl’s, you will see big discounts for a limited time. This is designed to increase the pressure on you, the consumer, to purchase a product. Because the price is lowered the deal is hot, so the manipulation of this variable is akin to increasing the temperature. Now because the sale is for a day, a weekend, or at best a week, the window of opportunity is short.

Where Kohl’s really amplifies this is in their basic pricing policy. Now I don’t have scientific data to support this, but just go there and look at the price of something that is not “on sale.” It is well above what you would pay elsewhere. So, when Kohl’s marks something down by 70%, the seemingly good deal, is actually only marginally better than a regular price elsewhere. However, the pressure exerted by limited time and perceived discounting is extremely effective in generating impulse buys.

Now, imaging you buy that sweater for 80% off, and do get what you believe to be an amazing deal. Here is where they really capitalize. You now need pants to go with them. Because it is easier to just get them while you are then, instead of taking the time to go somewhere else, you purchase the pants at a price that delivers a huge margin for the store. Brilliant. Kohl’s maximizes this impulse by locating farther away from the competition in strip shopping centers – not in the mall where comparison shopping is easier.

Am I saying that the shirt you got for $4.00 marked 90% off was a rip off. No way. It was a great deal. Just realize that there is more to the sale than the cheap shirt – there is the rest of the outfit that comes with a price. Kohl’s is masterful in manipulating price and time to generate pressure to purchase. Thus, they are a great illustration of the ideal gas law in the context of marketing.

Where do you see this concept illustrated? Please share your thoughts by leaving a comment.

If I Was In Charge of Microsoft, the First Thing I Would Do…

Before we talk Microsoft, let me talk about the premise here.  How many times to you hear yourself or someone else make the following statement,  ”If I was in charge of that company the first thing I would do would be…”  I hear it every day, and probably utter the phrase myself every other day.

Sometimes we say this about our own company.  Sometimes about a rival.  Sometimes it is the result of a bad experience with a company you love, or a pleasantly surprising experience at a business you never knew existed.

I find it fascinating to hear what people think should be done.  I have a hunch, people in corporate marketing departments might be interested too.  Thus, I introduce the following series of posts.  If I was in Charge…

Now, as a consumer, my belief is that through choosing where to spend your money, you are indirectly in charge, but this is different.  I am saying if you had absolute power to make one change in a company, right now, what would you do?

I like to use Rod Sommer’s matrix of considering ease of implementation relative to size of impact.  So based on this model, the best things to do are those that are easy to get done, and result in huge results.  You may subscribe to a different decision making model.  That is where the fun is.  Your thoughts.

So I hope you will share with the world by commenting.  No idea is too small, or big, and everyone is welcome to play along.

So back to the post.  The first company in this series is one that everyone knows, and many love to hate – Microsoft.  Never in history has a company whose products so many people use so frequently been so hated.  This company literally changed the world with DOS, Windows, Office, and other tools.  However, the firm’ history is full of aggressive business practices that have led many to label it as the devil.

Microsoft has been in the news a lot lately.  From the shortcomings of Windows Vista, to the failed acquisition of Yahoo, to Steve Ballmer getting eggs thrown at him during a speech, Bill Gates’ retirement, and the introduction of their new touch screen technology called Multi-Touch, there are ample headlines about this Redmond, Washington based Goliath.  With all the turmoil facing Microsoft, I think it might be fun to ask “If I were in charge of Microsoft, the first thing I would do would be…”

For me, it would be creating a new version of the Windows operating system that was smaller, faster, and did much less.  The opposite of Vista.  I would want it to be able to perform basic functions, have little vulnerability to computer viruses, and be extremely stable.  No bells.  No whistles.  It would just work.  It should run on any computer built in the last decade, and reflect simplicity and intelligence.  It would never crash, and it would be very responsive to the user.

I would market it to retiring baby boomers, who spend a lot of time exchanging email, looking at pictures, and looking up and storing basic information.  I would then create a stripped down suite of applications to run on the plaform – Office Light.  Using the 80 / 20 rule, this would only offer the most used, and most useful features.  It would be easy to learn, and again it would just “work.”  This would also be ideal for young children, seeking to learn how to use a computer – that would be a second target market.  This could yield a new crop of low end, value priced computers, built to provide basic services and reliable performance, and a whole new market could be created for products.

If I were in charge of Microsoft, that is the first thing I would do.   What about you?  What is the first thing you would do if you were in charge of Microsoft.  Would you try to buy Apple?  37Signals? Would you make a play for Ask.com?  Yahoo again?  Facebook?  LinkedIn?  Would you get out of the software business or focus solely on enterprise applications?  Would you fire Steve Ballmer?  What is the first thing you would do?  Please chime in and share by leaving a comment, and look for more posts like this to follow.

http://online.wsj.com/article/SB121193874854224859.html?mod=rss_whats_news_us

Happy Birthday Wordpress

Wordpress turns 5 today.  I would just like to say thanks and congratulations on 5 years of success.  I know that I have benefited in countless ways from blogging, and much of that blogging has been done on the Wordpress platform.  Whether reading my favorite blogs or writing my own, Wordpress is a big part of my daily routine.

In honor of this milestone, I decided to pull the posts from my old hosted wordpress site, voice.wordpress.com, and integrate them into the current site.  So, the archives are a little deeper today.  For now, they are all categorized under marketing, but I will go through and properly catalog them in the next few weeks to make life easier.  In the meantime, I hope you enjoy rummaging through the remnants.

Happy Birthday Wordpress!

WordPress › Blog » WordPress Birthday Party

Voices Episode 4: Jimmy Vee and Travis Miller

Gravitational Marketing: It Ain’t heavy, It’s Just My Podcast.

Jimmy and TravisYesterday, May 20th, 2008, I had the opportunity to spend an hour talking to Jimmy Vee and Travis Miller – authors of the newly released book Gravitational Marketing. Jimmy and Travis found me through the Physics of Marketing posts series, and thought that it tied in well with their book. Thus, they asked if I would be interested in hosting a podcast to talk about Gravitational Marketing. I jumped at the chance, and I am glad I chose to do so. The experience was wonderful. I got to read a great new book. I learned more about smart ways to attract new customers. And, I made a new connection with a couple really smart, interesting, and all around great people.

About the book…

Gravitational Marketing is an easy read, and well worth the price. I knocked it out in under 2 hours, and must say that I picked up dozens of great ideas. The first half of the book is a discussion of Gravitational Marketing as a philosophy. They look at common misconceptions people have about marketing and attracting customers. Here are some key takeaways from the first half of the book.

  • There are 3 key rings that create successful marketing. Market, Message, and Media. For marketing campaigns to be successful these elements must work together.
  • The process of gravitational marketing is broken down into 4 key components – Gravitate, Captivate, Invigorate, Motivate
  • To be worthy of attraction, or sensational, a business should be: interested, unique, fun, visible, credible, and spreadable
  • Become an expert at something
  • People buy because of a perceived high return on investment, emotional benefits, or believability, not because of chance, price, or advertising
  • great marketing, effective marketing that yields results, does not have to be expensive and does not require an ad agency

So, if the first half of the book is the “What and Why” portion of the program, the second half is “How to” part. Jimmy and Travis offer 36 easy techniques to attract customers. From direct mail to radio, social networks, to networking, presentations to print, these guys cover the bases of what it takes to bring in the business. There are dozens of links to various vendors and industry experts and real world example of tips and tool that you can immediately put to use.
Please take a listen to the podcast, and let me know your thoughts. I would encourage you to check out Travis and Jimmy’s web site, and pick up a copy of Gravitational Marketing.

 
icon for podpress  Voices Episode 4 - Jimmy Vee and Travis Miller [47:39m]: Play Now | Play in Popup | Download

Seth Riffs on Proximity

A few weeks back I was discussing Newton’s Law of Gravitation and the importance of proximity in Marketing. This discussion revolved around the idea of getting close to the customer, and how that can yield huge dividends. Seth Godin has furthered the discussion with this great riff on proximity.

Seth looks at the implications of proximity relative to the pain experienced by the consumer. The closer you are to the consumer, the more you understand their pain. The better you are at relieving that pain, the more value you bring. The more value you bring, the more you can charge for what you do.

Think about how trust and relationships play a role in your purchasing decisions, especially in today’s fast paced world. The modern marketplace is more fragmented than even, and the ability to attract attention through sheer mass becomes more difficult every day. Conversely, it seems that technology is making proximity – which according to Newton is exponentially more important than mass – easier to achieve every day.

Seths Blog: Proximity to pain

The Physics of Marketing – Hooke’s Law

SUSPENDERSScientist, Physicist, Mathematician and all around genius Robert Hooke lived in the mid 1600’s.  Much of his work revolved around his law of elasticity, which stated that elastic materials stretch in proportion to the force applied to them.  Some materials are more elastic than others.  Understanding this principle allowed for sailors to measure longitude, architects to design amazing structures, people to use pocket watches, and bungee jumpers to… well… to jump of bridges and survive.  In short, strain causes stress, and certain materials respond differently to stress.

At risk of sounding redundant from last week’s post, I think this again illustrates the importance of treating different customers differently.  Choose your best customers and design your products, services, and your customer experiences to capitalize on their common elastic principles.  Give your best customers more of what they want, and work on giving value up front in exchange for bringing them back again and again.  Give to get.  Give more, get more, find new ways to give more and on and on.

Bear in mind, different materials have different elastic principles.  Some are highly elastic, and others not at all.  Consumers are the same.  Find the right group, and then do something amazing for them.

What is your interpretation of Hooke’s Law as it pertains to marketing?  Please further the discussion by sharing your thoughts in the form of a comment.