Segmentation, Targeting, Positioning

STP Marketing – Meaning

Segmentation, Targeting and Positioning (STP) is a consumer-centric marketing approach. It helps marketers divide a large market into smaller groups, choose the most suitable group, and position the product effectively in the minds of consumers. STP allows companies to deliver relevant and personalized marketing messages. This model improves marketing efficiency and customer satisfaction while reducing costs.

Meaning of Market Segmentation

Market segmentation is the process of dividing a large and heterogeneous market into smaller, homogeneous groups of consumers. Each segment consists of customers with similar needs, preferences, and buying behaviour. Segmentation helps marketers understand customers better and design suitable products. It is the first and most important step of the STP model.

Types of Market Segmentation

1. Demographic Segmentation

Demographic segmentation divides the market based on factors such as age, gender, income, education, occupation, and family size. It is the most commonly used form of segmentation because demographic data is easy to measure. Different products are designed for different age groups and income levels. For example, luxury products target high-income groups, while budget products target price-sensitive customers.

2. Psychographic Segmentation

Psychographic segmentation is based on lifestyle, personality, values, attitudes, and interests of consumers. It explains why consumers behave in a certain way. This type of segmentation helps marketers understand emotional and psychological motives behind purchases. For example, fitness brands target health-conscious consumers.

3. Geographic Segmentation

Geographic segmentation divides the market based on location such as country, region, city, climate, or population density. Consumer needs differ according to geographical conditions. Companies customize products according to regional preferences. For example, clothing brands sell woolen clothes in cold regions.

4. Behavioural Segmentation

Behavioural segmentation is based on consumer behaviour such as brand loyalty, usage rate, benefits sought, and response to marketing. It focuses on how consumers use products. This segmentation helps companies design marketing strategies for frequent or loyal users. For example, discounts for repeat customers.

Meaning of Targeting

Targeting is the second step of the STP model, where a company selects the most attractive market segment to serve. After segmentation, the firm evaluates each segment based on size, profitability, and growth potential. The company then focuses its marketing efforts on selected segments. Targeting helps businesses use resources efficiently.

Targeting Criteria

1. Size

The target market must be large enough to be profitable. If the segment is too small, it may not justify marketing investment. Companies analyze whether the segment can generate sufficient revenue.

2. Measurability and Difference

Segments must be clearly measurable and different from each other. Each segment should have distinct needs. This allows marketers to design specific strategies for each group.

3. Profitability

The expected profits from the segment should exceed marketing costs. Companies avoid segments that are expensive to serve. Profitability is a key decision factor.

4. Accessibility

The segment must be easily reachable through marketing channels. Companies should be able to communicate and distribute products effectively. Inaccessible segments are avoided.

Meaning of Positioning

Positioning is the process of creating a distinct image of a product in the minds of the target customers. It focuses on how a product is perceived compared to competitors. Positioning highlights unique benefits and value offered by the product. Effective positioning helps build strong brand identity.

Positioning Criteria / Types of Positioning

1. Symbolic Positioning

Symbolic positioning focuses on enhancing the customer’s self-image and social status. Products are positioned as symbols of luxury, prestige, or success. Luxury cars and premium brands use this positioning. It appeals to emotional needs.

2. Functional Positioning

Functional positioning emphasizes product performance and problem-solving ability. It highlights practical benefits such as quality, durability, and efficiency. Brands like toothpaste or detergent often use this approach. It appeals to rational consumers.

3. Experiential Positioning

Experiential positioning focuses on customer experience and emotional connection. It aims to create memorable brand interactions. Companies use events, demonstrations, and campaigns to engage consumers. This builds strong emotional loyalty.