STP Exam-Prep Bullet Notes

Segmentation–Targeting–Positioning (STP) Framework

  • Goal: match firm offerings to the most attractive customer groups for sustained profitability.
  • Three sequential steps:
    • Segmentation: divide market into distinct groups with different needs/behaviours.
    • Targeting: evaluate each segment’s attractiveness & select segment(s) to serve.
    • Positioning: craft desired product image in consumers’ minds via marketing-mix decisions.

Segmentation Strategies

  • Four primary bases (often combined):
    • Geographic ((world/regions, city/town, density, climate)).
    • Demographic ((age, gender, family size/life-cycle, income, occupation, education, religion, race, nationality)).
    • Psychographic ((social class, lifestyle, personality traits)).
    • Behavioural ((occasion, benefits sought, user status/rate, loyalty, buyer readiness, attitude)).

Effective Segment Requirements

  • Measurable – size & purchasing power quantifiable.
  • Accessible – segment reachable/servable.
  • Substantial – large/profitable enough & growth potential.
  • Differentiable – responds uniquely to marketing-mix.
  • Actionable – practicable programs can be developed.

Targeting Strategies

  • Undifferentiated (Mass) Marketing: one offer for entire market.
  • Differentiated (Segmented) Marketing: distinct offers for multiple segments.
  • Niche Marketing: large share of one/few narrowly defined segments.
  • Micro-Marketing: customise to local areas or individuals.
  • Continuum: Broad →\rightarrow Narrow targeting.

Positioning Fundamentals

  • Define product relative to competitors to satisfy target-segment benefits.
  • Requires: competitor insight ++ target needs ++ clear differential advantage.
  • Utilize full marketing-mix ((product, price, place, promotion)) to reinforce position.

Common Positioning Zones (Matrix 1)

  • Leader, Prestige, Performance – most profitable.
  • Economy, Value – good but vulnerable.
  • Price, Follower – transitional.
  • Rip-Off, Past Laurels, Loss Leader – temporary/unsustainable.

Additional Matrix Examples (Highlights)

  • Quality vs. Price →\rightarrow e.g., confectionery brands.
  • Generic–Premium grid →\rightarrow commodity vs. super-premium tiers.
  • Social/Ego/Conservative/Progressive →\rightarrow automotive images.
  • Performance vs. Fuel Efficiency →\rightarrow sports cars vs. eco-cars.

Quick Review Checklist

  • Can you list the 44 segmentation bases & at least 22 variables for each?
  • Do you recall the 55 effectiveness criteria acronym M A S D AM\,A\,S\,D\,A?
  • Which targeting strategy offers custom solutions at individual level?
  • Name 33 long-term profitable positioning zones.

Reference Videos

  • “Introduction to Customer Segmentation” – first 2626 minutes summarise class.
  • “Segmentation, Targeting and Positioning – Learn Customer Analytics” – 99-minute recap.