Segmentation Targeting Positioning (STP) in Marketing

Companies can not connect with all customers in large, broad, or diverse markets. But they can divide such markets into groups of consumers or segments with distinct needs and wants. A company then needs to identify which market segments it can serve effectively. This decision requires keen understanding of consumer behavior and careful strategic thinking. Identifying and satisfying the right market segments is often the key to marketing success.

Segmentation 

Segmentation-pictorial-definition

To compete more effectively, many companies are now embracing target marketing. Instead of scattering their marketing efforts, they’re focusing on those consumers they have the greatest chance of satisfying.

Effective target marketing requires that marketers:

  1. Identify and profile distinct groups of buyers who differ in their needs and wants(Segmenting market)
  2. Select one or more market segments to enter( Market targeting)
  3. For each target segment establish and communicate the distinctive benefits of the company’s market offering(Market positioning).

Segmentation-Horlicks

Horlicks, a leading health food drink brand in India from Glaxosmithkline(GSK) has been providing”pleasurable nourishment” to a wide spectrum of consumers ranging from children and adults to elderly people. The company is able to serve wide segment of customers. I think example is clear to make you understand what is segmentation. There are several factors which are the bases to segmentation.

 

 

Variable-of-market-segmentation
Market segment variables 

Targeting 

Segmentation Targeting Positioning (STP) in Marketing

As the word suggests, Targeting is the post step to market segmentation. There are many statistical for developing market segments. Marketers are increasingly combining several variables in an effort to identify smaller, better, defined target group. For example a bank may not only identify a group of wealthy retired adults but within that group distinguish several segments depending on current income, assets, savings, and risk preferences. This has led some market researchers to advocate a need based market segmentation approach. 

Effective segmentation criteria for targeting

Not all segmentation schemes are useful. To be useful market segments must rate favorably on five key criteria:

  1. Measurable –  The size purchasing power and characterstics of the segment can be measured
  2. Substantial –  The segments are large and must be profitable to serve. A segment should be the largest possible homogeneous group worth going after with a tailored marketing programs. For example, for an automobile manufacturer to develop cars for people who are less then 4 feet tall.
  3. Accessible –  The segments can easily be reached and served.

 

Targeting-in-Marketing

 

Positioning 

Positioning-in-marketing

Once you are done with the previous steps and you have formulated a correct target segment then next step is to position your product. While positioning your product there must be essence of two factors. Point of parity and point of difference. 

  • Point of parity: You must offers your product to your target segment in a way that customers find value in them. Sufficient number of consumer must believe the brand is “good enough” on the dimension to use them or prefer over others.
  • Point of difference: As the word suggests, there must be difference in your product in the offering. Customers usually evaluate product with their point of difference.

Taking example of Savlon where they had to highlight “No string” properties while countering Dettol market giant of that particular time. Savlon-positioning-STP

“Positioning the brand and regaining trust are all smart things for us to do and those are the litmus tests for any decisions we make”.

-John McKinley

Hope this post helped you to clear basic concepts of Segmentation, targeting, positioning. This topic is very vast if studied in detail but enough to understand the concepts though with this post.

Kumar Prashirsh

An avid reader and blogger, Prashirsh is a digital marketer and also following his interest for blogging and turned blogger who writes contents for enhancement of knowledge for his reader. He truly believes in self which boosts his confidence towards life.

Kumar Prashirsh has 16 posts and counting. See all posts by Kumar Prashirsh

18 thoughts on “Segmentation Targeting Positioning (STP) in Marketing

  • October 4, 2017 at 8:04 PM
    Permalink

    Good examples
    Nice and informative

    Reply
    • October 5, 2017 at 8:25 AM
      Permalink

      Thanks. Example are the best way in marketing for clearing concepts. keep visiting

      Reply
  • October 4, 2017 at 8:06 PM
    Permalink

    Example of horlicks was good

    Reply
    • October 5, 2017 at 8:27 AM
      Permalink

      Thanks. There are many more examples. If you are a management aspirant, I will suggest you to develop examples on your own. Not only Horlicks we have many examples like smartphones.

      Reply
  • October 4, 2017 at 8:09 PM
    Permalink

    I need help in designing STP model for fmcg product. Please help.

    Reply
  • October 4, 2017 at 8:14 PM
    Permalink

    Please write something on 4P’s on marketing corelating any product.

    Reply
  • October 4, 2017 at 8:19 PM
    Permalink

    Segmentation part is very ellaborative.

    Reply
    • October 5, 2017 at 8:30 AM
      Permalink

      Segmentation is the main aspect, if you are correctly segmented your customers you will be better able to target them and also position your product

      Reply
  • October 4, 2017 at 8:22 PM
    Permalink

    What if Segmenting is well driven but company fails while positioning?

    Reply
    • October 5, 2017 at 8:33 AM
      Permalink

      If you fails in positioning then pre-steps will go in vain. If you have segmented right then you must know how to position your product/services. What you are trying to communicate must match the need of consumers.

      Reply
  • October 4, 2017 at 8:28 PM
    Permalink

    Well composed article. Keep updating more topics on marketing. I am MBA aspirant and thanks, my concepts are clear for segmentation targeting and positioning.

    Reply
    • October 5, 2017 at 8:35 AM
      Permalink

      Soon I will allow to users to subscribe. Till then keep visiting my site, It will definitely help through out your course. you can also suggest new topics.

      Reply
  • November 4, 2017 at 8:08 AM
    Permalink

    This aticle is very informative that i have ever read . Hope you will again provide us more knowledge like this good work you have done .

    Reply
  • November 5, 2017 at 8:36 AM
    Permalink

    Segmentation targeting positioning is important aspect in marketing. Great to see informative content.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *