STP marketing as a term gets thrown around a lot in the business world.
So what actually is it?
STP marketing is a strategic approach that allows companies to focus on meeting the needs of specific customer groups. It stands for Segmentation, Targeting, and Positioning, and it is a framework that helps businesses to better understand their customer base, create more effective marketing strategies, and ultimately, improve their overall business performance.
The STP marketing process starts with market segmentation, where the target market is divided into smaller, more manageable groups based on certain characteristics, such as demographics, behaviors, or needs.
Next, businesses identify which of these segments are the most profitable or desirable to reach, which is known as targeting.
Finally, companies develop a marketing mix tailored to each specific segment, which is known as positioning.
This article will discuss the STP marketing framework, its importance, and practical applications.
Let’s get into it.
What is STP Marketing?
STP marketing is a strategic approach used by businesses to target specific customer groups in order to meet their unique needs and wants. The STP acronym stands for Segmentation, Targeting, and Positioning, which are the key elements of this marketing strategy.
In the STP marketing process, the first step is to divide the market into distinct groups of consumers with similar characteristics and needs. This is known as market segmentation.
Once the market has been segmented, the business then selects one or more of these segments to target with its marketing efforts. This is known as targeting.
Finally, the business creates a marketing mix that is tailored to the needs and characteristics of the chosen segment(s). This is known as positioning.
The goal of STP marketing is to enable businesses to better understand and meet the needs of their target customers, which in turn can lead to more effective marketing campaigns, increased customer satisfaction, and higher profitability.
Why is looking at marketing from an STP perspective important?
The Importance of STP Marketing
STP marketing is crucial for businesses as it helps them understand their customers’ needs and create more effective marketing strategies.
Let’s explore 4 key reasons why STP marketing is important:
1. Better Understanding of Customers
Segmentation allows businesses to group their customers based on shared characteristics, which can provide insights into their behavior, preferences, and needs.
This, in turn, enables companies to create more targeted and relevant marketing messages, products, and services, leading to increased customer satisfaction and loyalty.
2. More Efficient Use of Resources
Targeting specific customer segments allows businesses to focus their resources, such as time, money, and effort, on the most profitable and valuable customers.
By avoiding a “one-size-fits-all” approach, companies can maximize the impact of their marketing efforts and generate a higher return on investment.
3. Competitive Advantage
STP marketing enables businesses to differentiate themselves from competitors by offering unique products, services, or marketing messages tailored to specific customer segments.
This can lead to increased customer loyalty, as well as the ability to charge premium prices for products or services that are perceived as more valuable by the target market.
4. Adaptability and Flexibility
Market conditions and customer preferences can change over time. By continuously evaluating and adjusting their segmentation, targeting, and positioning strategies, businesses can remain agile and responsive to these changes.
This allows them to stay relevant in the marketplace and continue to meet the evolving needs of their customers.
Now that you have an idea of the importance of the STP marketing method, let’s break it down.
The 3 Pillars of STP Marketing
The STP marketing model comprises three main pillars: market segmentation, market targeting, and market positioning, let’s dive into each one of them
1. Market Segmentation
Market segmentation is the process of dividing a heterogeneous market into smaller, more homogeneous groups of consumers who have similar needs, wants, or characteristics.
This is done to better understand and target specific customer groups with tailored marketing efforts.
There are 5 common methods of market segmentation, including:
- Demographic Segmentation: Dividing the market based on demographic variables such as age, gender, income, education, and occupation.
- Geographic Segmentation: Segmenting the market based on geographic variables such as region, city size, climate, and population density.
- Psychographic Segmentation: Dividing the market based on psychological characteristics, attitudes, values, lifestyles, and behaviors.
- Behavioral Segmentation: Segmenting the market based on consumer behavior, including usage rate, loyalty, purchase occasion, and benefits sought.
- Firmographic Segmentation: This is B2B specific and involves segmenting the market based on company characteristics such as industry, company size, revenue, and number of employees.
The idea is that by using these segmentation methods, businesses can identify and prioritize the most valuable customer segments and tailor their marketing efforts to meet the specific needs of each group.
After segmentation, now it’s time to target.
2. Market Targeting
Once a market has been segmented, the next step is to select one or more of these segments to target with marketing efforts. This process is known as market targeting or target marketing.
There are three main types of target markets:
- Undifferentiated Targeting: This strategy involves targeting the entire market with a single marketing mix. It assumes that all customers have similar needs and wants and can be satisfied with the same product or service.
- Differentiated Targeting: Also known as multi-segment targeting, this strategy involves targeting two or more distinct market segments with separate marketing mixes. It recognizes that different customer groups have different needs and preferences.
- Concentrated Targeting: This strategy involves targeting a single, specific market segment with a specialized marketing mix. It is often used by smaller companies with limited resources or in niche markets.
The key to successful market targeting is to identify segments that are both accessible and profitable.
An accessible segment can be reached and served effectively, while a profitable segment is large enough or has enough purchasing power to justify the investment in marketing.
Ok, now let’s look into market positioning.
3. Market Positioning
Market positioning is the process of creating a distinctive image or identity for a product, brand, or company in the minds of the target customers. It involves defining how a company wants to be perceived relative to its competitors in the market.
To develop an effective positioning strategy, businesses must consider the following elements:
- Differentiation: Identifying and communicating unique features or benefits that set the product, brand, or company apart from competitors.
- Relevance: Ensuring that the positioning is relevant and important to the target customers and addresses their key needs and wants.
- Credibility: Establishing credibility by providing evidence or reasons why the company’s claims or promises are true and believable.
- Consistency: Maintaining a consistent and coherent message across all marketing efforts to reinforce the desired positioning.
- Competitive Framework: Defining the competitive framework, which involves understanding the strengths and weaknesses of key competitors and how the company’s positioning compares to theirs.
Market positioning is crucial for creating a strong and memorable brand that resonates with the target audience and stands out in the marketplace.
By understanding and implementing these three pillars of STP marketing, businesses can create a focused and effective marketing strategy that is tailored to the specific needs and characteristics of their target customers.
Now, let’s talk strategy.
How to Implement STP Marketing Strategy
Implementing an STP marketing strategy involves several five key steps that will help businesses connect with their target audience and drive success.
Below are the steps you need to follow to create an effective STP marketing strategy:
1. Conduct Market Research
The first step in the STP marketing process is to conduct thorough market research. This involves gathering data on customer demographics, behavior, preferences, and needs.
Market research provides insights into what makes your customers tick and helps you identify the different segments within your market.
2. Segment Your Market
The next step is to divide your market into distinct segments based on shared characteristics such as age, income, location, or interests.
Segmentation helps you better understand your audience and tailor your marketing efforts to their specific needs and preferences.
3. Choose Your Target Market
After segmenting your market, you need to choose which segment(s) you want to target. This involves evaluating the size, profitability, and growth potential of each segment.
By selecting the most promising segment(s), you can focus your resources on reaching the customers who are most likely to be interested in your products or services.
4. Position Your Brand
Once you have chosen your target market, you need to position your brand in a way that resonates with your chosen segment(s).
This involves creating a unique value proposition and communicating it clearly through your marketing messages.
Positioning helps you differentiate your brand from competitors and establish a strong presence in the minds of your target audience.
5. Develop Marketing Tactics
The final step is to develop specific marketing tactics to reach and engage your target market.
This may include advertising, social media campaigns, email marketing, or other promotional activities.
By aligning your tactics with your chosen segment(s) and brand positioning, you can maximize the impact of your marketing efforts and drive growth for your business.
Examples of STP Marketing in Practice
Let’s check out a few real-world examples of STP marketing in practice to help you better understand the concept.
1. Apple
Apple is a prime example of a company that has successfully used STP marketing to dominate the tech industry.
The company has strategically targeted specific customer segments, such as professionals, creatives, and early adopters, with products tailored to their needs and preferences.
Lastly, Apple’s focus on innovation, design, and user experience has helped position the brand as a premium choice in the market, allowing it to command higher prices and maintain a loyal customer base.
2. Coca-Cola
Coca-Cola is another example of a company that has effectively implemented STP marketing.
The company targets a wide range of consumer segments, from young people to families, with various product offerings, such as Coca-Cola Classic, Diet Coke, and Coke Zero.
Coca-Cola’s marketing campaigns are designed to appeal to the emotions and lifestyles of different segments, helping the brand maintain a strong market position and global presence.
3. Lululemon
Lululemon is a successful athleisure brand that has utilized STP marketing to target specific customer segments.
The company focuses on active, health-conscious individuals, with a strong emphasis on yoga enthusiasts and women.
Lululemon’s products are designed for performance and style, catering to the needs of its target audience. The brand has built a loyal following by creating a community around its products and promoting a healthy and active lifestyle.
These examples demonstrate how STP marketing can be applied in various industries to connect with **specific customer segments, differentiate brands, and drive success.**s
Hopefully, now you’ve got a great idea of STP marketing.
Let’s wrap this up.
Wrap Up
Now you know, that STP marketing is an essential framework for any business that wants to connect with its target audience and drive success.
By segmenting your market, targeting specific customer groups, and positioning your brand effectively, you can create a more focused and tailored marketing strategy.
Furthermore, this approach allows you to better understand your customers, use your resources more efficiently, and differentiate your brand from competitors.
So, whether you’re a tech giant like Apple, a global brand like Coca-Cola, or a niche player like Lululemon, STP marketing can help you better understand your customers and achieve your business goals.
Happy Marketing Friends!
More of a video learner check out this great clip by EPM.
Frequently Asked Questions
What is the STP process in marketing?
The STP process in marketing refers to the steps a business takes to identify and target specific customer segments. STP stands for Segmentation, Targeting, and Positioning.
First, the company segments its market into smaller groups with similar characteristics. Next, it selects the most attractive segment(s) to target based on factors such as size, growth, and profitability.
Finally, the company develops a unique marketing mix to position its products or services in a way that resonates with the chosen segment(s).
How does STP help in marketing?
STP helps in marketing by allowing businesses to focus their resources on the most promising customer segments. By segmenting the market and targeting specific groups, companies can create more tailored and effective marketing strategies.
This, in turn, leads to better customer understanding, increased customer satisfaction, and a higher return on investment for marketing efforts.
What are the three steps of the STP process?
The three steps of the STP process are Segmentation, Targeting, and Positioning.
Segmentation: Dividing the market into smaller, more homogeneous groups of customers with similar characteristics or needs.
Targeting: Selecting one or more of these segments to focus on, based on factors such as size, growth, and profitability.
Positioning: Developing a marketing mix to create a distinct and favorable position for the company’s products or services in the minds of the chosen segment(s).
What is the STP model?
The STP model is a marketing framework used by businesses to identify and target specific customer segments. STP stands for Segmentation, Targeting, and Positioning.
The model helps companies to better understand their customers, create more effective marketing strategies, and ultimately, achieve higher customer satisfaction and profitability.
How is STP used in marketing?
STP is used in marketing by guiding businesses through the process of identifying, targeting, and positioning their products or services to specific customer segments.
This helps companies to tailor their marketing efforts, messages, and products to better meet the needs of their target customers, leading to more effective and efficient marketing strategies.
What is STP strategy?
STP strategy is a marketing approach that focuses on segmentation, targeting, and positioning to better understand and meet the needs of specific customer segments.
By implementing an STP strategy, businesses can create more effective and tailored marketing efforts, leading to increased customer satisfaction and profitability.
