STP marketing simplifies the market segmentation process and is one of the most commonly used approaches in modern marketing. The core focus of STP marketing is commercial effectiveness. Marketers use the approach to select the most valuable segments from a target audience and develop a product positioning strategy and marketing mix for each.
|Definition||STP Marketing, which stands for Segmentation, Targeting, and Positioning, is a strategic approach used by businesses to identify and engage with specific customer segments effectively. It involves dividing the market, selecting target segments, and positioning products or services to meet their needs.|
|Segmentation||Segmentation is the process of dividing a broad market into smaller, homogeneous customer segments based on shared characteristics, needs, behaviors, or demographics. It helps businesses understand their diverse customer base and tailor marketing efforts.|
|Targeting||Targeting involves selecting one or more customer segments that align with a company’s goals and resources. It’s about identifying the most attractive and profitable segments to focus marketing efforts and allocate resources effectively.|
|Positioning||Positioning is the strategy of creating a unique and compelling image or perception of a product or service in the minds of the target audience. It aims to differentiate the offering from competitors and communicate its value and benefits effectively.|
|Market Research||Market research is a critical component of STP Marketing. It involves gathering data and insights about customer preferences, behaviors, pain points, and market trends. This information guides segmentation, targeting, and positioning decisions.|
|Customer Persona||A customer persona is a detailed, semi-fictional representation of an ideal customer within a specific segment. It includes demographic information, goals, challenges, and preferences. Personas help in creating personalized marketing campaigns.|
|Target Audience||The target audience consists of the individuals or groups selected for focused marketing efforts. It represents the customers most likely to purchase the product or service. Businesses tailor messages and promotions to resonate with this audience.|
|Value Proposition||A value proposition is a concise statement that communicates the unique benefits and value a product or service offers to the target audience. It addresses the “why buy” question and helps in positioning the offering effectively in the market.|
|Competitive Analysis||Analyzing competitors in the selected segments is crucial. It involves identifying their strengths, weaknesses, market share, and positioning strategies. This information informs how a business can differentiate itself and offer superior value.|
|Marketing Mix||The marketing mix, often represented as the 4Ps (Product, Price, Place, Promotion), is tailored to suit each target segment. It ensures that product features, pricing strategies, distribution channels, and promotional tactics align with segment-specific preferences.|
|Messaging||Effective messaging involves crafting messages, content, and advertising that resonates with the selected segments. It addresses their pain points, needs, and aspirations, showcasing how the product or service can fulfill those desires.|
|Customization||Customizing marketing efforts for each segment is key. This may include segment-specific campaigns, content, product variations, or pricing strategies. The goal is to create a personalized experience that appeals to the unique characteristics of each segment.|
|Examples||– Apple: Segments its market based on factors like device type (iPhone, Mac), user behavior, and demographics, then positions products accordingly. – Nike: Targets different market segments, such as athletes and fashion-conscious consumers, with tailored products and marketing. – Coca-Cola: Adapts its product offerings and messaging to cater to various regional preferences and demographics. – Amazon: Customizes product recommendations and shopping experiences based on individual user behavior and preferences.|
|Benefits||– Improved targeting and relevancy in marketing efforts. – Enhanced customer satisfaction and loyalty. – Higher conversion rates and sales. – Efficient allocation of resources. – Competitive advantage through differentiation. – Better understanding of customer needs.|
|Drawbacks||– Requires substantial market research and data analysis. – Complex marketing strategies for multiple segments. – Potential for increased costs due to customization. – Risk of overlooking emerging segments or market shifts. – Maintaining consistent brand identity across segments can be challenging.|
|Applications||STP Marketing is widely used across industries, including consumer goods, technology, fashion, automotive, and hospitality. It is applicable to any business looking to optimize its marketing efforts and create more targeted and effective campaigns.|
Understanding STP marketing
When used in the way it is intended, STP marketing fosters communication with a customer segment that is clear, focused, relevant, and most importantly, personalized.
It can also be used to discover new customers and niches or market opportunities that increase the efficiency and ROI of marketing efforts.
The three stages of the STP marketing model
The STP model is an acronym for three stages which are explained below.
The idea of the STP model is to start with a broad, anonymous audience and then determine how different products (or components of the one product) relate to each customer segment.
Market segmentation may be based on:
- Demographic – gender, income, education level, marital status, or occupation.
- Psychographic – political affiliation, hobbies, opinions, personality traits, or attitudes.
- Geographic – neighborhood, city, province, state, shire, country, or region.
- Behavioral – how does the market use the product? This includes how the product was financed, how much it is used, brand loyalty, and the key product benefits sought.
The second stage aims to analyze each segment created earlier to determine which is most likely to generate the desired conversion.
Depending on the campaign, a conversion may encompass the sale of a product or a user signing up for an email newsletter.
The attractiveness of a given segment depends on:
- Size – how large is the segment and what is its potential for growth?
- Difference – there must be a measurable difference between one segment and the next. Without difference, efforts are unnecessarily duplicated.
- Profitability – which segment is willing to spend the most money? Calculate the customer lifetime value (CLV) and compare it with others.
- Ease of reach – to what extent can the segment be reached with a marketing effort? Will it be easy or difficult? Customer acquisition cost (CAC) is an important metric here.
- Benefits – are the benefits specific to the segment? For example, one customer segment of a dairy company may prefer lactose-free milk, while another may prefer goat milk.
Given what it has learned so far, the marketing team must now decide how it wants to communicate with customers.
To make the company’s products and services stand out, it is important to perform competitor analyses and determine the value proposition.
A brand positioning map can also be used to clarify the brand’s unique or desirable attributes.
In terms of product positioning, there are myriad techniques. Some of these include:
- Functional positioning – where a product or service offers a benefit that solves a genuine customer problem.
- Experiential positioning – where the focus is on the emotional connection between the customer and the product, service, or brand.
- Symbolic positioning – where the product is positioned to enhance the self-image, social status, or ego of the customer. Luxury brands touch on these points frequently when marketing to consumers.
- Apple’s Product Line Segmentation:
- Segmentation: Apple divides its customer base into segments based on various factors such as lifestyle, preferences, and technology usage.
- Targeting: Apple targets different segments with specific product lines like the iPhone, iPad, and MacBook. For example, the iPad is positioned as a versatile tablet for both work and leisure, targeting professionals and students.
- Positioning: Apple positions its products as premium, high-quality, and user-friendly, emphasizing innovation and design.
- Coca-Cola’s Regional Marketing:
- Segmentation: Coca-Cola tailors its marketing strategies to different regions and countries, considering cultural differences, taste preferences, and local traditions.
- Targeting: The company targets specific markets with variations of its products, such as Coca-Cola Classic, Diet Coke, and Coke Zero, to cater to diverse consumer tastes.
- Positioning: Coca-Cola positions itself as a refreshing beverage for moments of happiness and celebration, emphasizing its role in bringing people together.
- Luxury Fashion Brands:
- Segmentation: Luxury fashion brands like Gucci, Chanel, and Louis Vuitton segment their customers based on income, lifestyle, and brand affinity.
- Targeting: These brands target high-net-worth individuals who seek exclusivity and luxury experiences.
- Positioning: Luxury fashion brands position themselves as symbols of prestige, craftsmanship, and timeless style, appealing to the desire for status and elegance.
- Toyota’s Hybrid Cars:
- Segmentation: Toyota segments the automobile market based on environmental consciousness and fuel efficiency.
- Targeting: The company targets eco-conscious consumers with its hybrid models like the Prius, aiming to reduce carbon emissions.
- Positioning: Toyota positions its hybrid cars as environmentally friendly and technologically advanced, emphasizing fuel efficiency and reduced environmental impact.
- McDonald’s “Happy Meal”:
- Segmentation: McDonald’s segments its customers based on age, specifically targeting children and their parents.
- Targeting: The “Happy Meal” targets children with small toys and kid-friendly food options.
- Positioning: McDonald’s positions the “Happy Meal” as a fun and enjoyable dining experience for children, making it a popular choice for family outings.
- Fitness Brands and Wearables:
- Segmentation: Fitness brands like Fitbit and Garmin segment the market based on health-conscious individuals and fitness enthusiasts.
- Targeting: They target consumers who prioritize tracking their physical activity, heart rate, and health metrics.
- Positioning: These brands position their wearables as tools for achieving fitness goals, promoting an active and healthy lifestyle.
- Netflix’s Content Recommendations:
- Segmentation: Netflix segments its subscriber base by analyzing viewing habits, genres, and preferences.
- Targeting: The platform targets viewers with personalized content recommendations, suggesting movies and TV shows based on individual tastes.
- Positioning: Netflix positions itself as a provider of tailored entertainment experiences, enhancing user satisfaction and engagement.
- STP marketing is a model that increases the relevance and personalization of marketing messages to a target audience.
- STP marketing fosters communication with a particular customer segment that is clear, focused, relevant, and most importantly, personalized.
- STP marketing is an acronym for three stages: segmentation, targeting, and positioning. The three stages help explain how each segment requires a custom marketing mix and positioning strategy for the best results.
Key Highlights of STP Marketing:
- Definition: STP marketing, which stands for Segmentation, Targeting, and Positioning, is a widely used approach in modern marketing aimed at enhancing commercial effectiveness. It involves selecting valuable customer segments, developing personalized marketing messages, and creating product positioning strategies.
- Enhancing Relevance and Personalization: STP marketing is designed to make marketing messages more relevant and personalized for specific target audiences. It facilitates clear, focused, and relevant communication with customers.
- Discovering Opportunities: STP marketing can help businesses discover new customer segments, niches, or market opportunities, improving the efficiency and return on investment (ROI) of marketing efforts.
- Three Stages of STP Model:
- Segmentation (S): In this stage, marketers divide the broader audience into distinct segments based on criteria such as demographics, psychographics, geography, behavior, and more.
- Targeting (T): Marketers then analyze these segments to identify which ones are most likely to lead to desired conversions, considering factors like segment size, difference from others, profitability, ease of reach, and benefits.
- Positioning (P): The final stage involves determining how to communicate with the chosen target segments. It includes competitor analysis, defining the unique value proposition, and deciding on product positioning techniques.
- Factors Affecting Attractiveness: When targeting specific segments, marketers consider factors like segment size, differentiation, profitability, ease of reach, and the relevance of benefits offered.
- Positioning Strategies: Product positioning can involve various strategies, including functional positioning (solving customer problems), experiential positioning (emotional connections), and symbolic positioning (enhancing self-image or social status).
What are the three stages of STP marketing?
What does market segmentation comprise in STP marketing?
In STP, marketing segmentation comprises:
What does targetimng comprise in STP marketing?
In STP, targeting comprises:
- Ease of reach.
What does positioning comprise in STP marketing?
In STP, positioning comprises:
- Functional positioning.
- Experiential positioning.
- Symbolic positioning.
What is a Market Segmentation?
Market segmentation is the process of dividing the market into sub-groups. Market segmentation can be based on characteristics such as age, behaviors, income levels, and more. This process helps to understand what your key customers want, where they are, and how to talk to them effectively.
What is meant by marketing segmentation?
Market segmentation is the process of breaking down the market in potential segments that have specific features and characteristics. Those segments help to drive sales and marketing activities, business experimentation, grow the distribution channels of a business, and build successful marketing strategies that help build strong brands in the marketplace.
Read Next: Market Segmentation.
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