STP — Segmentation, Targeting, Positioning

Marketing Area

STP (Segmentation, Targeting, Positioning)

Explanation

STP Framework

The STP (Segmentation, Targeting, Positioning) framework helps businesses identify and select the right customers and create a suitable offering for them.

Market Segmentation

Market segmentation is the process of dividing a total market into distinct subgroups of consumers who share similar characteristics and needs.

Segmentation Bases:

Demographic: Dividing the market based on variables such as age, gender, income, education, occupation, and family size.
Geographic: Dividing the market into different geographical units such as nations, regions, states, counties, cities, or neighborhoods.
Psychographic: Dividing the market based on lifestyle, personality traits, values, opinions, and interests.
Behavioral: Dividing the market based on consumer knowledge, attitudes, uses of a product, or responses to a product, including benefits sought, user status, usage rate, and loyalty status.

Targeting

Targeting involves evaluating each market segment's attractiveness and selecting one or more segments to enter.

Targeting Strategies:

Undifferentiated (Mass Marketing): A strategy that ignores market segment differences and targets the whole market with one offer.
Differentiated (Segmented Marketing): A strategy that targets several market segments and designs separate offers for each.
Concentrated (Niche Marketing): A strategy in which a firm goes after a large share of one or a few segments or niches.
Micromarketing (Local or Individual Marketing): Tailoring products and marketing programs to the needs and wants of specific individuals and local customer segments.

Positioning

Positioning is the act of designing the company's offering and image to occupy a distinct and valued place in the target customers' minds relative to competing brands.

Perceptual Map: A visual tool used to show consumer perceptions of a brand versus competing brands on key buying dimensions.
Positioning Statement: A statement that summarizes company or brand positioning using the form: 'For [target segment and need], our [brand] is [concept] that [point of difference].'