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Since the construction industry in Taiwan started declining at the beginning of 1990s, many firms withdrew from this industry. Most of the surviving firms downsized their organization, and expanded their business to other markets or industries for continuous operation. However, after our survey, we find that there are construction companies who focus on original industry and market but still make good profit under the severe recession. Tunghuei Construction Company, who sells single houses in HsiaoKung Area of Kaohsiung, is just the best example.
The ROI every year of Tunghuei Construction Company in past 10 years was over 20%, except 1999(The ROI of 1999 was 15.8%). Among the past decade, there are five years in which Tunghuei''s ROI was over 30%. This is a very rare example of Taiwan''s construction industry. The manager of Tunghuei Construction Company indicates that the company''s success is because of "target marketing". After analyzing the environment of the construction industry in Taiwan, we find it an monopolistic-competitive market that is very good for target marketing and just fits the concept of Tunghuei Construction Company very well.
After studying Tunghuei Construction Company, we find that it has its own strategic developing model of target marketing, which matches normal academic definition. Tunghuei uses geographic and behavioral variables to segment market, and decides to sell cheap single houses in HsiaoKung, which is more competitive than multi-storey buildings and similar products. Sample houses, advertising billboards, and handbill mailing are three main promotion ways of Tunghuei. Talking about distribution, Tunghuei uses bonus system to make old customers help promotion, in addition to salesmen. Tunghuei also pays much attention to public relationship by helping hold activities of the schools and community in HsiaoKung. In recent ten years, Tunghuei sold all the houses in every case with reasonable profit. Besides, over 80% of Tunghuei''s customers feel satisfied with its products according to the result of the questionnaire survey.
By studying the successful experience of Tunghuei Construction Company''s target marketing widely and deep, we hope to do something for Taiwan''s construction industry.
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