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.

Yesterday, 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.

Here is a link to the podcast Voices Episode 4

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

Scientist, 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.

People Protest Starbucks, Story Misses Point…

As reported in this story by the DBJ, there is a group of consumers upset with Starbucks.  As the story outlines, the group is angry about the new logo that adorns Starbucks’ coffee cups.  What is omitted from the story is the reason for the logo change.  So, I thought I would take a few sentences to fill you in on the reason behind the switch.

A few weeks back Starbucks introduced a new brew called Pike Place Roast.  This brew is designed to be more similar to the coffee that was served in the original location in Seattle decades ago.  It is actually quite good coffee, and it is brewed fresh every 1/2 hour.  Clearly this was done in response to the high rankings that McDonald’s received in blind coffee taste tests done last year.  Starbucks did not fare so well in the same tests and has made a move to get back to what the company does best - brew good coffee.

The logo mentioned in the article, the one a small group of people are upset about, was introduced to coincide with the release of Pike’s Place Roast.  This logo is actually the original Starbucks’ logo.  Its use is symbolic of the company’s commitment to a return to its roots.  For a great article about the complete history of the logo, check out this blog post from author of the book Tribal Knowledge and the blog Brand Autopsy, John Moore.

The article in the business journal does a nice job of describing why the protesters are upset, but forgot to mention the reason why the company made the switch.  For those thinking of joining the protest, don’t waste  your time.  The old logo is just part of an eight week promotion, which is winding down.  Do not fear.  The family friendly mermaid will be back in only a matter of days.  Just when you start to kick that caffeine addiction, all will be back to normal.

Revealing new Starbucks mermaid logo gets mixed reviews - Dayton Business Journal:

GetMidwest Campaign Facing Global Competition?

I saw on Esrati.com today that the Dayton Development Coalition launched their GetMidwest.com website. In my humble opinion, all sides have now voiced their respective opinions on the merits and shortcomings of this campaign, and it seems as if there is not much more to say about it. In spite of my creative differences, I will certainly “get behind it” by freely telling people about the quality of life in Dayton and the surrounding area - something I already do regularly. The site does look very nice. There are beautiful photographs, maps, industry information, and all kinds of interesting facts about Dayton, Ohio and the Miami Valley.

There are a few concerns though….

Google Get Midwest, and you get a bunch of blogs, mine included, questioning it. Uhhhh.. that’s not so good. Same results if you include Dayton in the Query.

Of greater concern is the threat of global competition with Get MIdwest posed by this breaking news…

GetMideast - The Tehran Region: “We Think of Everything… For You”

Based on the reports that I am getting from my sources on the ground, the campaign is focused on how the Tehran Region, led by government officials, is proactively coming together through investing heavily in the growing industry of the nuclear technology industry cluster - for peaceful means only of course.

I hope that no one will mix this up with our campaign. We are a totally different direction. Midwest!

Of Even More Concern is This Campaign….

GetMedieval: “We Get Even…A Pair of Pliers and a Blowtorch”

Well, at least we didn’t pick that one…

I hope the people at the DDC have a sense of humor, and I do sincerely hope the Get Midwest campaign is successful. Southwestern Ohio is a great place, with a lot to offer. The cost of living is low, the weather is nice (most of the time), there is little traffic to speak of, clean water, plenty of entertainment, creative thinkers, innovative businesses, and amazing and friendly people everywhere.

If you were looking for the DDC site and came across mine, know that I think Dayton is wonderful. And if you are out there thinking should I or shouldn’t I “Get MIdwest,” the answer is yes. Yes, you probably should.

Have you heard of similar campaigns? If so, please do share. Best that we know now.

Get Yourself Connected…

Thanks to Michelle Kaye at Battelle and Battelle, who brought me in today to speak about networking, social media, blogs, networking, and the emerging web to a number of her fellow employees as well as some of the employees of McGohan Brabender.  Originally the event was going to be held at Battelle and Battelle, but because of the large number of people who signed up, it was moved down the street to McGohan Brabender.   I was thrilled that so many would show up to hear me speak.

My presentation revolved around the concept of using the web to connect with others and to create and develop, as Tom Peters would call it, Brand You.  In addition to discussing some general concepts, I spoke specifically about tools like Twitter, Squidoo, WordPress, and LinkedIn - discussing how these tools could be used in conjunction with traditional items like hand written thank you notes and face to face meetings to connect with the world.   We live in a truly amazing time.  Never before have individuals been so empowered to learn, share, and grow both personally and professionally.  I appreciate being given the opportunity to share the little that I know with others.  It was my pleasure, and I hope that those who took the time to listen to me enjoyed my presentation.   Thanks for your hospitality.

McGohan Brabender - Welcome To McGohan Brabender

Dirty Video from Dayton

When is it alright to do something dirty with your friends and co-workers?  When you enter a team in the Epilepsy Foundation of Western Ohio Mud Volleyball Tournament on July 12, 2008.  This year the theme is “Mudstock - Peace, Love, Mud.”  Starting at 9:00am and lasting all day, it will be located at Wegerzyn Gardens Metropark 1301 E. Siebenthaler Avenue in Dayton, Ohio.   This event brings in almost 25% of the annual funding for the Epilepsy Foundation of Western Ohio - so it is just as important as it is fun.  Get a team together, get dirty, and have some mid summer fun.  Registration is easy, and if your team registers in May it is only $275 per team.  Not convinced?  Check out these “dirty pictures” from last year’s event.  Need more proof?  Take a look at this cool video that Mike Kurtz and his team at UD put together.  Still not convinced.  Perhaps you are just not the dirty type.  You can still be a part of the fun.  Help the cause by volunteering to help with running  the event.   There are also opportunities for sponsoring the event, if your company is looking for a great way to give back to the community.  All we are saying is give mud a chance.  Seriously, there are very few events that allow you to have this much fun while doing something meaningful for others.  For more information contact the Epilepsy Foundation of Western Ohio.  I look forward to seeing you there.

Thanks to all of the sponsors and volunteers who have already worked so hard to make this event successful.

Mud Volleyball 2008

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