Marketing and Business Performance of Construction Smes in China

Topics: Marketing, Business, Small business Pages: 20 (6884 words) Published: June 10, 2013
Marketing and business performance of construction SMEs in China Yiming Tang
Macquarie Graduate School of Management, Macquarie University, North Ryde, Australia

Paul Wang
School of Marketing, University of Technology, Sydney, Australia, and

Yuli Zhang
Department of International Business Administration, International Business School, Nankai University, Tianjin, China Abstract Purpose – 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. Design/methodology/approach – The paper consists of a qualitative pilot study and a quantitative main survey. Findings – 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. Research limitations/implications – The study has possible location and industry-specific limitations. Practical implications – 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 postWorld Trade Organization era. Originality/value – 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. Keywords Small to medium-sized enterprises, Construction industry, China, Marketing strategy, Business performance Paper type Research paper

An executive summary for managers and executive readers can be found at the end of this issue.

Since economic reforms that began in 1978, China’s gross domestic product (GDP) has been increasing around 9 percent per annum and together with a population of 1.3 billion people (National Bureau of Statistics of China, 2004), China is fast becoming one of the largest economies in the world. Given the growing importance of the Chinese market, there is a need to study the impact of marketing-related variables on business performance of small and medium-sized enterprises (SMEs) in China. SMEs are a key element in China’s economy, accounting for 99 percent of the total number of firms, 69.7 percent of overall employment, 48.5 percent of total firm assets (China Enterprises Association, 2001), and 65.6 percent of China’s gross output value of industry (National Bureau of Statistics of China, 2004, p. 33). The current issue and full text archive of this journal is available at

Journal of Business & Industrial Marketing 22/2 (2007) 118– 125 q Emerald Group Publishing Limited [ISSN 0885-8624] [DOI 10.1108/08858620710730230]

It is therefore vital to study SMEs’ marketing practices and their relation to business performance. Such research can not only generate guidelines for best practice, but also help to develop theories that are relevant to the business environment in China. Research in this area should help SMEs operating in China’s post-World Trade Organization (WTO) era to formulate effective strategies to ensure their long-term wellbeing and development in an increasingly competitive environment. Furthermore, such research has policy implications for the government. However, most of the existing theories or conceptual frameworks on SMEs were developed in the West and only a limited amount of rigorous...
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