STP Model: Segmentation, Targeting, Positioning (STP) is your bread and butter in marketing.
Seriously. Tet these 3 things right… and you’ll make it rain.
But how does it work, exactly? Let’s see.
Markets are composed of customers with different needs. These needs are often very diverse and it’s impossible to satisfy all of them.
That’s why marketers often segment their markets and identify the most attractive segments to target.
They then develop suitable positioning strategies and allocate resources to prioritize the most important marketing activities.
The use of the STP model has become more and more popular. This is due to the increasing prevalence of mature markets, greater diversity in customer needs, and the ability to reach niche segments.
In this article, you’ll learn exactly how and when to deploy each of these strategies, so your marketing can be as effective as possible.
No more throwing money into the toilet, okay?
The STP model starts with dividing up the market, which is called market segmentation. Market segmentation refers to the division of a mass market into identifiable and distinct groups (segments). Each of these segments has common characteristics and needs, and displays similar responses to marketing actions. Various segmentation criteria can be used to divide up the market, including demographic, geographic, psychographic and behavioral variables.
The second part of the STP model is targeting. This refers to determining which, if any, of the segments uncovered should be targeted and made the focus of a comprehensive marketing programme.
According to the popular “DAMP” approach to targeting, as defined by Philip Kotler (1984), for market segmentation to be effective, all segments must be:
The last part of the STP model is positioning, which means to ensure that a brand occupies the right spot in the mind of target consumers. Positioning is the means by which goods and services can be differentiated from one another and thereby give consumers a reason to buy. It encompasses two key elements. The first concerns the physical attributes, functionality, and capability that a brand offers, such as a car’s engine specification and design. The second element concerns the way in which a brand is communicated and how consumers perceive the brand relative to competing brands in the marketplace.
The key benefits of using the STP model include:
Companies should thus always use the STP model as a starting point instead of simply developing a product and then finding the right customers to sell it to. By following the process of segmentation, targeting and positioning, a clear picture of the needs and wants of the customers is obtained, which serves as a foundation for developing suitable solutions to unique customer problems.
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