This study aims to examine the association between a number of variables pertaining to marketing strategy and business performance of small construction firms in Tianjin, China. The paper consists of a qualitative pilot study and a quantitative main survey. Long-term differentiation marketing strategy, research and development (R&D) as a percentage of sales, and years in business are found to be positively associated with a small firm's business performance. Current product focus, government policy, quality and availability of services, conducting regular market research, firm's registered capital and employee number, being a supplier to a few large firms, and having a few regular suppliers are not found to be significantly associated with business performance. The study has possible location and industry-specific limitations. Managerially, the findings encourage small Chinese firms to adopt a long-term differentiation strategy, focusing on R&D and new product development. Government should disseminate this knowledge and facilitate small firms in obtaining necessary external finances to support their R&D programs. Such measures are vital for small firms to adapt to the increasingly competitive business environment in China's post-World Trade Organization era. By systematically examining relationships between marketing strategy and performance of the small Chinese firms, this study adds knowledge to the field of small firm research in China.
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