Tag: keda

Tech students report on ‘market leakage’

Market leakage is a growing issue for Copper Country retailers, particularly online.

That was one of the takeaways at a presentation by Michigan Technological University students at the Keweenaw Economic Development Alliance meeting Wednesday. This is the second year School of Business and Economics Assistant Professor of Marketing Jun Min’s students have done the study, for which they received 71 responses.

In 13 product categories, this year’s study showed increasing market leakage in nine of them, including a 33 percent jump in electronics and office materials and 14 percent in cars. The four areas with stable and decreasing trends were household essentials, personal care products, groceries and medicine and drug.

Different areas benefitted the most from various areas of leakage. Online led for areas such as toys, clothing and telecommunications devices, while Marquette led in areas such as home improvement and outdoor living. The only area in which Green Bay absorbed the greatest market share was in automobiles, with 18.2 percent of respondents saying they had purchased a car in Green Bay.

It was a different story in services, where only four categories went up – rentals, real estate, household improvement and health/medical/dental. The largest decrease in leakage was 12 percent in airline and vacation services.

The bulk of the leakage was online, particularly in airline and vacation services, rental cars and education. Marquette’s strongest categories were restaurants and health/medical/dental. Green Bay again led in only one category: entertainment, museum and shows.

The local market trended downward in the Business Market Wellness index, which measures market attractiveness, satisfaction and recommendation.

The local market scored 3.35 out of 5, where 3 is neutral – behind online, as was the case last year, and also now behind Marquette and Green Bay. The weakest score was in market satisfaction, where the local market scored 3.06.

“That means people are attracted to our market, they like it, but they’re not satisfied,” said Tech student Cory Rokes. “This is something we want to rectify.”

Projections of future spending shows most to stay about the same, but with an edge toward online; 24 percent said they planned to spend more online in the next six months, more than twice the next highest total.

The group also conducted a separate leakage study for the Houghton County Memorial Airport. Of those surveyed, only four in 10 had used in the airport in the past year.

“The problem isn’t the market leakage, it’s promoting the airport,” said Tech student Sarah Ochs.

By GARRETT NEESE – DMG writer (gneese@mininggazette.com) , The Daily Mining Gazette

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.

What’s the (Business) Plan?

Photos courtesy of Kayleigh’s Photography. Story originally posted in Tech Today. Written by Dennis Walikainen, senior editor, university marketing and communications.

Students participated in the second annual Business Plan Competition Tuesday night, and great ideas were flowing in Fisher 139.

Sponsored by the Institute for Entrepreneurship and Innovation and the School of Business and Economics, the competition featured future businessmen and women promoting their ideas in front of a panel of judges, who had previously reviewed their written plans.

The five-minute pitches covered a broad range of business ideas, and the winning plan was Books With Purpose by Jodhbir Singh, master’s student in EE, and Aman Bamra, bachelor’s student in CS.

“Books With Purpose would be India’s first nonprofit online bookstore,” Singh explained. “Thirty-five percent of India’s population is illiterate, and we would help address this problem by donating one book to under-supported schools for every five we sell.”

Singh and Bamra would approach India’s middle and upper classes to support their mission and their business, especially targeting rural areas, where illiteracy is more prevalent.

They took home $1,500 in cash and $2,700 worth of local consulting services: logo, accounting and legal services for their winnings. Singh planned on returning to India after graduation to pursue the business.

Two Bows, a company founded by Jessica Tompkins, a junior majoring in management, took second place in the competition and was familiar to the crowd. She won the Elevator Pitch Competition last fall with her business, which creates hunting apparel for women that could also be worn elsewhere.

Targeting “outdoorsy females, ages 12 to 50, in the northern states,” Tompkins has already started producing demos of her clothing to further pitch her idea, including the blouse she was wearing.

“We would eventually like to expand our online e-commerce sales and even donate proceeds to families of breast cancer patients and the Dream Hunt Program for terminally ill children,” she said. Second place garnered her $500, which she said she would reinvest in the company.

Third place and $250 went to Collin Stoner and his company, Selene, which will manufacture electric motor drivers. He has already been working with a company called Medical Minds to promote his device, which could be used to move the beds in CAT scan machines, for example.

“I’ve spent 400 engineering hours on making the prototype,” Stoner said. “And each one would have its own, unique computer chip, making duplication by competitors difficult.”

Other businesses pitched to the judges were retirement planning for lower income and middle-class people who might have fallen on hard times; cloud computing with improved information gathering; and a social network site for environmentally conscious people and organizations.

Bob Mark, professor of practice in the School of Business and Economics, who emceed the event, doled out the cash to the students and announced that there are plans for a major increase in funding next year, in cooperation with Central Michigan University. Mark sees the beginning of a mutually beneficial relationship with Central, with expanded entrepreneurial opportunities and other academic relationships.