Market Research Project on Business Leakage Presented to KEDA

Republished from the Daily Mining Gazette. Written by Garrett Neese.

HANCOCK – Market leakage in the area is clear and should be properly managed, a Michigan Technological University marketing research team told a Keweenaw Economic Development Alliance members Wednesday.

The group is made up of students in the market research class of Jun Min, a professor in Tech’s School of Business and Economics.

“We can’t necessarily tell you guys what you can do, should do or shouldn’t do,” said Patrick Smith. “What we can do is give you information.”

The local area loses the most business in product categories, particularly clothing, apparel and shoes; home improvement; and toys and video games, the study found.

“Approximately five out of 10 of our respondents are shopping outside the local area for those three product categories,” said student Abby Koski.

The highest retention rate for products were in electronics and office materials (88.9 percent), household essentials (82.6 percent) and grocery (81.4 percent).

People chose other markets for specific products. Marquette is biggest in things such as home improvement, grocery and car. In contrast, online strengths and toys and video games, sports and fitness, telecommunications devices, and medicine and drugs.

Service categories were comparatively unaffected. Far and away the biggest loss was in airline and vacation services, where only 14.7 percent purchased locally. The next three were education and learning (53.7), restaurants (59.5) and entertainment (63.3).

The highest local results were in personal care services (93.3), household improvement services (92.9) and real estate service (91.7).

Breaking it down by gender, females are less likely than males to shop online or locally, while males have a lower preference for Green Bay. The local market’s lowest point relative to other markets in is December, while Green Bay’s trough is in February.

Online performance stayed high throughout the year; most respondents said they are very likely to shop online within the next six months.

Because of the small sample size from Ontonagon County, the five respondents were omitted from the final report.

Seven others were left out for incomplete or poor quality responses.

The group said future study of the issue would hopefully have a larger and more representative sample base: the survey used 73 respondents, more female than male. Respondents were chosen through systematic random sampling; those recruited over the phone then filled out an online survey.

Solutions, they said, could involve creating more incentives, building student internship programs for the survey or developing a Keweenaw consumer opinion panel.

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