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 post-World 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.