The Physics of Marketing - Ideal Gas Law
May 31, 2008 by davidebowman
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.
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PV=nRT!
I love this equation (the Ideal Gas law)! I had this and many other equations driven into my head by my high school Chem II teacher John Ruehl. Mr. Ruehl had a particular passion for teaching these topics. He’d develop catchy phrases to help us remember the Ideal Gas, Charles’ and Boyle’s Laws (’piv-nert’ he used to say).
So, it was to my dismay that when I began studying Thermodynamics in college, I found that the Ideal Gas law had a very limited range. Outside of STP (standard temperature and pressure, 25C and 1 atm), it quickly falls apart. While it still provides an estimate of what will happen, it is very innaccurate. It had to be replaced by other ‘Equations of State’ which also had a particular range where they were accurate and were much less elegant and more difficult to solve. Enter the marketing discussion.
What attracts interest to one group of consumers doesn’t neccesarily work for everyone. Sometimes you miss the mark. This can either be a disaster or a dream. A poorly targeted marketing campaign, while well thought out, can completely miss its mark. A well targeted marketing campaign knows its range, its target audience, its goal. Much like the Equations of State I mentioned earlier, knowing which one to use in a given situation will deliver the desired result. Using the Ideal Gas Law under non-ideal situations leads to shortcomings.
My week hinges on your next physics post. Keep them coming.
This equation works well for me with regard to overbearing sales people. The more pressure they apply, the hotter I get.
I used to work as a data entry operator in a Federated Department Store when I was in college. When I saw that they bought a skirt for $10 and marked it up to $80, I decided never to shop in a department store or mall again. Absolute legalized theft.