What is STP marketing?

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.

Understanding STP marketing

STP marketing is a model that increases the relevance and personalization of marketing messages to a target audience.

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.

Segmentation (S)

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.

Targeting (T)

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.

Positioning (P)

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.

Key takeaways:

  • 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.

What are the three stages of STP marketing?

The three stages of STP marketing comprise:

What does market segmentation comprise in STP marketing?

In STP, marketing segmentation comprises:

  • Demographic.
  • Psychographic.
  • Geographic.
  • Behavioral.

What does targetimng comprise in STP marketing?

In STP, targeting comprises:

  • Size.
  • Difference.
  • Profitability.
  • Ease of reach.
  • Benefits.

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.

Marketing Glossary 

Affiliate Marketing

Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.

Ambush Marketing

As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.

Brand Building

Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.

Brand Equity

The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.

Brand Positioning

Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.

Business Storytelling

Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.

Content Marketing

Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.

Digital Marketing

A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.

Growth Marketing

Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.

Guerrilla Marketing

Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.

Inbound Marketing

Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.

Integrated Marketing

Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.

Marketing Mix

The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.

Marketing Personas

Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.

Multi-Channel Marketing

Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.

Multi-Level Marketing

Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.

Niche Marketing

A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.

Relationship Marketing

Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.

Sustainable Marketing

Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.

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