The 21st-century business world is dynamic; it is evolving every day with the introduction of new ideas that are changing customer desires. So, to effectively reach them and appeal to their interests, companies use STP marketing strategies, which stands for segmentation, targeting, and positioning. This particular plan helps brands break down the customer base, identify the important demographics, and create a curated marketing campaign that resonates with the targeted audience.
Over the years, the STP model has emerged as an integral part of marketing. So, let’s explore this triad of marketing strategies in this blog.
Unraveling the Segmentation in STP
In the modern world of marketing, understanding consumers and their demands is very important. It helps to develop the right product and place it correctly in the market to guarantee success. Segmentation plays a key role in this process.
With segmentation, you divide the market into smaller groups that have similar characteristics or needs. It helps you, the marketer, to analyse and comprehend the diversity within your consumer base and create marketing campaigns that address their specific needs.
Types of Market Segmentation
To create the right market segmentation strategies, you first need to know the ways of segmenting the market. Here are the details –
- Demography Based: Here, the idea is to divide the market based on demographic factors like age, gender, income, occupation, and marital status.
- Geography Based: Under this, the market is divided using geographical factors such as cities, states, and countries.
- Psychographic Based: In this case, psychographic factors like lifestyles, interests, values, and personalities are essential.
- Behaviour Based: Here, the behaviour of consumers, like shopping patterns, usage, and brand loyalty, receives importance. This process reveals crucial consumer behavior insights that help companies make knowledgeable decisions in their marketing efforts.
Why Segmentation is Important?
Forming the correct market segmentation strategies is essential to allocate the company's resources efficiently. With all the information at their disposal about different market segments, they can streamline their efforts better and avoid wasting time on uninterested segments. Furthermore, it also maximises the impact of marketing and brings better value.
As a result, they can create the right product, address the suitable consumer base, and ramp up their revenues.
Understanding Targeting in STP
Once the market segmentation is over, the next step is target audience identification. It means choosing the right segments that the business will focus on. Now, targeting is important as it enables companies to curate their marketing efforts to meet the specific needs of the selected consumer base instead of appealing to everyone.
Parameters of Targeting
Here are the pointers that need consideration for target audience identification –
- Market Size: Marketers need to assess the market size first, as it will help them understand the required effort.
- Growth Potential: It’s essential to factor in the growth potential to evaluate profitability and whether the effort will bring enough revenue.
- Accessibility: It is also important to understand whether or not the market segment is easily accessible through existing marketing channels.
- Competition: It goes without saying that one needs to address the competition.
- Compatibility: It is also important to gauge whether the segment aligns with the brand’s core values and principles.
Benefits of Effective Targeting
Now, there are multiple advantages of effective targeting in terms of marketing efforts. With the right target audience identification, you can curate your message and reach prospective customers without hassle. Also, it reduces costs through a more efficient allocation and usage of existing resources.
Apart from that, the right targeting helps you to compare different segments, evaluate their pros and cons, and move accordingly.
Understanding Positioning in STP
The last concept of STP in marketing strategies is positioning. It underlines the importance of placing a product in the consumer’s mind. The idea here is to create a unique image of the product that differentiates it from the rest and resonates with the chosen target segments.
Marketers use all the consumer behavior insights received from segmentation and targeting to decide how to communicate the product to customers.
Tips for Effective Positioning
- Understanding USPs: First, marketers need to understand USPs or unique selling propositions of the product. This can include anything from new features to the quality of the product to superior service.
- Creating the Statement: Next, you, as a marketer, must develop a product statement that perfectly conveys its ethos. Also, you must ensure that this statement represents brand values.
- Communicating the Message: Lastly, you need to spread the message using different marketing channels. Along with traditional options like newspapers and billboards, you can also use new media like Facebook, Instagram, and YouTube.
Importance of Positioning
In terms of marketing strategies, positioning plays a pivotal role. Through this step, you interpret all the insights that you have gathered so far, and if you mess up at this stage, all your effort goes into the vein.
Now effective positioning allows a brand to stand out in a crowded market. It ensures that your product comes up first when customers think of a particular need. It then generates sales and takes your brand to the next level.
Real-world Examples of STP
Apple: Apple positions itself as a premium brand that leads the world of smartphones in terms of innovation. Now, this particular positioning and its careful segmentation of targeting tech-savvy individuals have worked in its favour.
Maruti Suzuki: Since its inception, Maruti Suzuki has been popular for being reliable and fuel-efficient. This particular positioning has helped the company, its product design, and the customer to know exactly what they are getting into. As a result, the company's premium products in the recent past have not done well due to its positioning and presence in a particular market segment.
Final Thoughts
Segmentation, targeting, and positioning form one of the most popular and powerful marketing strategies. Over the years, STP has proved its mettle by creating successful marketing campaigns. This model helped marketers understand the audience and its temperament and develop campaigns that resonate with them. As a result, the brands received enormous success.
So, knowing the STP model is imperative if you want to become a business leader or an entrepreneur. You can also check out the senior leadership programs like IIML GSLP.
Connect with Imarticus Learning, which will help you move ahead in your endeavours.
