A Houghton storefront, featuring the shop 20 Below

Marketing Study Aims to Boost Local Economy

Faculty member and students try to help the local economy.

As businesses in the Keweenaw struggle to stay afloat in tough economic times, market leakage becomes a growing problem. Junhong Min, an assistant professor of marketing in the School of Business and Economics, is using advanced market research techniques to identify the sectors that are most susceptible.

Market leakage, which refers to the loss of customers to markets outside of the area, reduces profits for local businesses and damages the overall economic health of the Keweenaw and surrounding areas. Market leakage occurs when customers are not satisfied with the choices or prices they find in the local market and look elsewhere for their shopping needs.

In 2012, for the second year in a row, Min directed his marketing research class in a market leakage study to identify weak spots in the local market. The study addressed thirteen product categories, examining customer behavior in each area. Cory Rokes, a senior management student, welcomed the chance to work on a research project with real-world applications.

“The course gave me a systematic method for conducting marketing research,” he said. “I have entrepreneurship aspirations, and now I know how to identify and satisfy customers’ needs and wants. It really broadened my horizons.”

Rokes didn’t wait until after graduation to use his hard-earned research skills. He implemented marketing-research strategies in several student organizations to recruit members.

With guidance from Min, Rokes and his classmates applied the lessons learned from the original market leakage study to create a more effective result. “After the 2011 study, we determined that our results would be more useful if they focused on a specific industry,” said Min. “So, in 2012, we added a special extension that targeted the air travel industry.”

The airport study focused on the Houghton County Airport (CMX), which plays an important role in local economic growth. The project resulted in several intriguing findings that offered valuable insight for consideration by airport management. CMX is the only option within 100 miles of Michigan Tech. Min and his students found that frequent flyers, people who travel more than three times per year, prefer to fly out of CMX. In addition, 38 percent of the study participants use the airport for their business, proving its importance to the local economy. The study included a regression analysis, which determined the three most important factors for frequent flyers: driving distance, consistent flight schedule, and flight-delay handling. It also identified specific areas for improvement, like airport food service, the airport website, and Internet access in the terminal.

“This is the power of marketing research. It gives us actionable information—specific numbers—and customer insights—detailed feedback. Now, we hope that the results from the marketing research further promotes increased usage at the airport and customer satisfaction,” said Min.

With the success of the airport leakage study, Min plans to continue targeting different industries. The 2013 study will focus on online purchasing behavior, which is one of the biggest market leakage problems in the Keweenaw.

"The results will help local businesses learn how they can adjust their practice to compete with online retailers,” said Min.

In summer 2012, the Academic Office Building, home to the School of Business and Economics completed a renovation to make faculty-led projects such as Min’s more accessible. Students now have a designated area to complete call-center research. The new facility includes a conference table to discuss findings and workstations to collect survey data and compile reports.

All the efforts will pay off, they hope, as this important marketing research seeks to help keep Keweenaw businesses in business.

Michigan Technological University is a public research university founded in 1885 in Houghton, Michigan, and is home to more than 7,000 students from 55 countries around the world. Consistently ranked among the best universities in the country for return on investment, Michigan’s flagship technological university offers more than 120 undergraduate and graduate degree programs in science and technology, engineering, computing, forestry, business and economics, health professions, humanities, mathematics, social sciences, and the arts. The rural campus is situated just miles from Lake Superior in Michigan's Upper Peninsula, offering year-round opportunities for outdoor adventure.