1. UNIT 2 – SEGMENTATION, TARGETING AND POSITIONING
2. WHAT IS STP?
STP marketing stands for segmentation, targeting, and positioning. It is a three-step process that
allows for the development of a specific and actionable marketing strategy.
The main principle behind the process is to segment your audience, target each segmented group
according to their preferences and habits, and make positioning adjustments in your branding and
marketing strategies to accommodate their needs and expectations.
The reason why the segmentation-targeting-positioning process is so effective is that it breaks down
broader markets into smaller parts, making it easier to develop specific approaches for reaching
and engaging potential customers instead of having to use a generic marketing strategy that would
not be as appealing, or as effective.
3. The STP model is useful when creating marketing communications plans since it helps
marketers to prioritize propositions and then develop and deliver personalized and
relevant messages to engage with different audiences.
4. This is an audience-focused rather than product-focused approach to marketing communications which
helps deliver more relevant messages to commercially appealing audiences. The diagram below shows
how plans can have the flow from Audience options > Audience selection > Production positioning.
5. HOW TO USE STP IN STRATEGY BUILDING
Using STP marketing in your business may seem complicated, but the process can be broken
down into actionable steps.
First, you need to define the market that you want to reach and create market segments
based on segmentation variables and bases such as age, location, interests, or almost
anything else.
Then, evaluate each segment for viability, looking at how realistic it is to target them, and
choose the segments that show the most promise.
After performing thorough STP analysis and selecting the most promising segments,
developing a targeting strategy for that market (or markets), and identify the most
promising positioning opportunities for engaging that market.
6. MARKET SEGMENTATION
The process of segmentation is all about identifying distinctive and common traits between
people in your market, which allows you to develop much more relevant and engaging
marketing campaigns.
Some of the most common segmentation variables include:
-Demographics: age, gender, marital status, ethnicity, etc.
-Geography: city, region, country, climate, etc.
-Psychographics: personality traits, habits, attitudes, etc.
-Values: politics, religion, cultural beliefs, identifications, etc.
-Life Stages: work status, education status, retirement, etc.
-Behaviors: purchases, interests, clicks, browsing data, etc.
7. MARKET TARGETING
The next step is to look at the segments that you picked to identify the best opportunities
for your business.
First, you will need to look at the size of the segment, which will tell you whether it’s worth
pursuing. After all, the marketing opportunity must be large enough to warrant running a
campaign. Otherwise, it simply won’t be worth the effort.
The next step is to look at whether there are significant markers that set the segments
apart; these can become the basis of an STP marketing campaign.
Be sure to analyze the opportunity from a financial perspective—the profits that you can
expect should exceed the additional marketing budget that would be required to execute it.
8. The list below refers to what’s needed to evaluate the potential and commercial
attractiveness of each segment.
Criteria size: The market must be large enough to justify segmenting. If the market is
small, it may make it smaller.
Difference: Measurable differences must exist between segments.
Money: Anticipated profits must exceed the costs of additional marketing plans and other
changes.
Accessible: Each segment must be accessible to your team and the segment must be able
to receive your marketing messages
Focus on different benefits: Different segments must need different benefits.
9. MARKET POSITIONING
Finally, consider positioning opportunities that will help you respond to an unmet need or
desire in your market that your product can fulfill.
Since you have tangible data about what segments of your audience desire, you can use
those insights to position your product and develop a unique selling proposition, presenting
the right message at the right time.
Using customer segmentation models, you can completely revamp your product positioning
and center your campaign around the most pressing problem that your audience is facing.
With a segmented and specifically targeted audience, your product positioning can have a
much stronger impact, helping your message stand out in a crowded marketplace.
Expanding on the extremely basic example in previous slide, you can unpack the market by
mapping your competitors onto a matrix based on key factors that determine purchase.
12. MARKET TARGETING – importance
1. Determining Your Target Market
Determining a target market allows you to focus your marketing efforts in the most cost
effective way possible. Begin by clearly defining your product or service and then defining
the person or business that will want to use what you have to offer. Understanding the
needs of consumers is essential. You can often discover exactly how you can meet consumer
needs through careful market research including running a focus group, scanning industry
reviews or doing a market survey.
2. Craft Specific Messages
an interior decorator can tailor and market their services to a wide range of prospective
clients. The marketing message will need to be designed to attract either the high-end home
owner looking for an expensive make-over or the senior citizen looking to downsize while
still retaining some of their prized possessions. The needs are very different so each
marketing message must be crafted to reflect how each need will be met.
13. 3. Focus on Potential
Organizations don't have the time or resources to be able to reach everyone with a product
message. Identifying a target market allows marketers to focus on those most likely to
purchase the product. Limiting the population funnels research and budgets to the
customers with the highest profit potential.
4. Reach the Right Audience
Once you’ve identified the target market, consider the target audience — the intended
recipient of your advertising message. Many times the buyer of your product may not be the
same as the end-user so your message needs to be tailored to the person making the
purchases.
For example, everyone in the home benefits from laundry detergent, but it is most
frequently purchased by women who buy the family's groceries. For that reason, soap
commercials traditionally target moms who want their family in clean clothes.
14. This strategy is sometimes skewed however. When it comes to toys, kids are the big end
users, so it might be more effective to market directly to them. Even though it is their
parents who buy the toys, kids are big influencers of how their parents spend money in this
area. Messages marketed to kids can drive them to persuade their parents to make
purchases on their behalf.
5. Identify an Under-served Market
Businesses of any size can compete effectively by identifying under-served markets. Rather
than trying to reach every customer who could use your product, focusing a marketing plan
to fit a smaller and possibly unreached part of the total market can allow you to carve out a
niche for your product. By focusing resources on a specific customer segment, a small
business may be able to better serve a smaller segment of the market than its larger
competitors.
15. 6. Cost-effective Strategies
Once you know who you are targeting, it is much easier to make decisions on media
allocations. If your target market is young women, rather than purchase ad space in every
magazine, you can advertise only in those popular with that audience. You’ll save money and
get a better return on investment by using a target market plan. Media buys will be more
efficient as wasted audience — those unlikely to purchase your product — is greatly reduced.
16. MARKET POSITIONING- importance
Marketers can adopt various positioning strategies.
-Products can be positioned on specific product attributes – Sunsilk keeps hair soft and
shining.
-Products can be positioned on the needs they satisfy or the benefits they give – Peps
Flouride prevents tooth decay.
-Products can also be positioned on usage occasions – no Eid without Banoful vermicelli.
-Products can also be positioned for certain classes of users – Lifebuoy for athletes.
-A product can also be positioned against a competing product. For example, in its ads,
Citibank VISA compares itself directly with American Express, saying, “You’d better take
your VISA card because they don’t take American Express.”
-Another approach is to position the product away from competing products. For many
years, 7-up has positioned itself as the “Un-cola,” the fresh and thirst-quenching alternative
to Coke and Pepsi.
-Products are also positioned for different product classes. For example, some hair creams
are positioned against hair oils.
Marketers often use a combination of the strategies discussed above.
17. So why is positioning important?
1. Positioning as the interface between brand identity and brand image
Brand identity in the marketplace depends on positioning.
Customer’s perception of the brand develops only when the Market Positioning is proper.
2. Positioning as a source of competitive advantage
Better marketing positioning will give the company a competitive advantage over other firms
on the market.
3. Market Differentiation with Positioning – Positioning breaks the clutter of
noise
The are plenty of products, and the number of firms delivering them is several. Positioning
will help a firm to stand out in the crowd of sellers.
A clear Brand Position enables you to efficiently and effectively communicate and reach your
target audience.
Clear market positioning makes the brand and its product visible and attractive to the
customers.
4. Positioning Makes Buy easy for Customers
18. A company should, therefore, be careful in selecting ways of differentiation and provide for
the following criteria in its offer:
•Importance: If a product can deliver highly valued benefits to most customers, it will be
considered important by them.
•Distinctive: A product will be considered distinctive by the buyers if it offers something
not offered by the competing brands.
•Superior: If the difference seems to be better by the customers than other ways obtaining
the same benefit, they consider it superior.
•Communicable: Marketer should develop such a difference which can easily be
intimidated to market, and the market should be able to visualize that easily.
•Preemptive: If the competing firms cannot easily copy the difference, they possess the
preemptive feature.
19. •Affordable: Differentiation, you know, costs to the company, and the company realize
that from customers. It should, therefore, consider whether customers are in a position to
bear the same. If they can, such differentiation is called affordable.
•Profitable: To work out a differentiation company needs to incur a lot of costs. A
company does so with the hope of making a sizable profit through increased sales. If sales
do not increase proportionately to warrant company profit, such differentiation cannot be
called profitable.
20. A positioning strategy may be used to:
Differentiate a firm from its competitors in a mass-product market, or
Position a firm to serve target customers in one or more productmarket niches.
