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.

The Physics of Marketing - Conservation of Energy

This week’s Physics of Marketing post is about energy. It is clear when someone has energy and more clear when they lack it. Starbuck’s has made a fortune on regularly selling me cups full of energy in the form of caffeine laden black coffee.

Energy takes many forms, and is probably best thought of in terms of change or motion. Both are forms of kinetic energy. Potential energy is less intuitive, but equally important. It is the boulder at the top of the hill, which if nudged would descend with tremendous momentum, crushing anything in its path. While at rest, it is potential energy.

Conservation of Energy means that energy is neither created or destroyed, but rather that it simply is transferred from one form to another. There is a finite amount of energy, but seemingly infinite manifestations of that amount. Energy is the E in Einstein’s famous E=mc².. Energy is a fundamental part of the universe, and again is neither created nor destroyed.

So, how does the conservation of energy relate to marketing?

Immediately I was drawn to the idea of the interaction between a company and the consumer. The product or service offering of a company is designed to address some unfulfilled need of the consumer. “Wouldn’t it be great if that were bigger, faster, better, cheaper, more, easier, smarter, less, …” You get the gist. The consumer chooses if the need is important enough to act upon, and if so, can choose to seek help from a particular company. This all represents potential energy. The goal of marketing is to convert this into kinetic energy - initially this is a sale. But it does not end there.

If the initial sale goes well, there is a good chance that more of the consumer’s potential energy is converted to kinetic energy. This may take the form of repeat business. If things go exceptionally well, the consumer may choose to actively participate in the conversion process by spreading the word to friends and family. This positive word of mouth can deliver more kinetic energy. This should ultimately result in cash for the company - potential energy. At which point, the company might choose to invest in future innovation - potential energy.

Conversely, if the sale goes poorly, the conversion of energy from potential to kinetic follows a different path. If the experience is mediocre, most of the potential energy will likely remain unconverted, or will be converted by another provider. The consumer goes away, and the transaction is a one-time experience. If things go very poorly, large amounts of potential energy will be converted - this time to the detriment of the company. An angry consumer in the digital age can spread negative word of mouth far, wide, and fast. In instances where others share a similar negative experience, the result for the company can be devastating. . Consumers will move to competitors, and the company will struggle to survive.
According to Abraham Maslow, all people have needs. These needs constantly change form but always remain present. Thus energy is always present in the marketplace. Marketing seeks out potential energy. Great marketing maximizes its conversion to kinetic energy, and then back to potential energy again.

What do you think? Draw your analogy between Conservation of Energy and Marketing. Join the conversation and leave your comments.

The Physics of Marketing - Kepler’s Laws

German mathematician Johannes Kepler lived from 1571 - 1630.  He is described by many as the central figure in the scientific revolution for his work in astronomy and physics - two disciplines that were considered to be very different from one another in his time.  An independent thinker, he was very influential on shifting world views from the ancient to the modern.  To give context to the time in which he lived, I will mention that his mother was actually imprisoned for witchcraft for 14 months - accused of making another woman ill by collaborating with a demon to poison her with an evil brew. (No, I don’t know if his mom invented Jaeger)   Keppler was a true believer in the scientific method, and one who looked for patterns in everything.  He initially believed that planets orbited the sun in circular motions - basing his ideas on Geometry.  In attempting to verify this theory, he learned that his entire philosophy was flawed.  However, what he did do is to establish how all the planets in our solar system, and any object that orbits another, actually moves.

Kepler’s Laws:

1. Planetary orbits are elliptical with the Sun at one focus.
2. A planet sweeps out equal areas in equal times as it orbits the sun
3. The orbital periods scale with ellipse size, such that the period squared is proportional to the semi-major axis length cubed.

So…

What does this mean to modern marketing?

For me, I am noodling how to apply the theories themselves to Marketing.  I may lean on a physicist out there to get the ball rolling with respect to how these laws can specifically be applied.  Perhaps something along the lines of consumer behavior, seasonal patterns of demand, distribution, the product life cycle or speed to market?  I will continue to think on that one.  Feel free to jump in and start the discussion.

Certainly, there is much for Marketing professionals to learn from Kepler the man and the way in which he made his discoveries.  He was eternally curious about the truth.  He constructed hypotheses, tested, measured, analyzed, modified, and repeated.  He was well versed in mathematics and used geometry as the basis for his initial hypotheses.  At some point, he realized that his model was flawed.  He needed to change his view.  Some of his assumptions just did not make sense.  Rather than deny that fact, Kepler embraced the unknown.  He sought out the truth.  He took risks rather than trying to continuing on in the safety of the familiar.  The end result was a breakthrough.  Is this not the same way we should approach things like product development, direct sales, or customer service?

What do you think?  What is your hypothesis?  Is there something to be learned from Kepler’s Laws?  What is it and why is it important?  Tell us.  I promise, no witch trials.

Johannes Kepler - Wikipedia, the free encyclopedia

The Physics of Marketing - Mach’s Principle

Ernst Mach, was an Austrian Philosopher and Physicist. He lived from 1838 to 1916. His principle proposed the idea that “mass there influences inertia here.” That means that the gravity of far away things affects how nearby things move. Thus motion is only meaningful when measured against another object. For example, we know the earth is spinning because we can measure it relative to the stars. Without the stars, or some other point of reference, motion would be meaningless. Because Mass is the critical factor in motion, and every object in the universe is pulling on every other object, true motion can only be determined by examining mass.

[ Albert Einstein seemed to view Mach's principle as something along the lines of:

"...inertia originates in a kind of interaction between bodies..."^[3] ] - wikipedia

So what does this mean to marketing? How can you take the principles of a 19th Century Scientist and apply them to the modern discipline of Marketing? What is the analogy?

On an aside, please stay away from “this is the guy that the Mach 3 razor is named after.” While this is a pretty easily demonstrable way that Mach impacted Marketing, lets stick with Mach’s principle this week.

Please educate me. Drop some science knowledge and leave your comments.

Mach’s principle - Wikipedia, the free encyclopedia

The Physics of Marketing

The Physics of Marketing is a new project that I am launching. I don’t understand Physics. I have never taken a formal class on the subject, and my exposure to Physics has been limited. However, I find Physics to be fascinating. Something I do know a little about, though some days I question that too, is marketing. So here is the idea. I hope to gain a greater understanding of Physics, by asking the world to describe concepts from the discipline in analogies that would pertain to Marketing. I hope that this will generate a fair amount of discussion and debate, and ultimately I will come to learn more about both physics and marketing.

This project was inspired by two books.

1. Creativity by Mihály Csíkszentmihályi - an amazing book about what it means to be creative and how to cultivate creativity in every aspect of life.

2. 50 Physics Ideas You Really Need to Know by Joanne Baker. Not being a Physicist, I don’t know how good this one is. I do know that it lists 50 Physics ideas, (see the title) and offers a concise, easy to understand, explanation of each. I found this at the Borders outlet for 3 dollars and could not resist.

Ideally the project will work like this. Each week, I will place a concept from the world of physics up for discussion. I will offer my modest, and probably flawed explanation of the principle, and then I will ask the world to help me understand how this could be applied to Marketing. I am hoping that people will decide to play along and we can all learn and have a laugh with this. I have a few engineers in my family, and hope that will decide to chime it, as they are uber smart, funny, and frequently discuss things like this when together around holidays and special occasions. The discussion always ends up somewhere on physics, and I am stuck trying to piece together what they are talking about by listening for contextual clues. Perhaps by next Christmas, I will know what the heck they are talking about, and can participate in the discussion. Worst case, I will strengthen a glaring weakness in my Trivial Pursuit game.

So world, I invite you to play along and teach me, and everyone else who reads this site, a little something about science. Follow the advice of the renowned musical scientists the Beastie Boys, and drop some science knowledge on me “like Galileo dropped the orange.” It’s the sound of science.

Week 1 - Mach’s Principle
Week 2 - Newton’s Laws of Motion
Week 3 - Kepler’s Laws