File Name: market segmentation targeting and positioning examples .zip
- The Complete Guide to STP Marketing: Segmentation, Targeting & Positioning
- Target market
- STP Marketing: Segmentation, Targeting & Positioning Analysis
The Complete Guide to STP Marketing: Segmentation, Targeting & Positioning
What is STP marketing and what role does it play in boosting conversions and revenue? We look at the Segmentation, Targeting, Positioning framework illustrated by real-life examples.
Segmentation targeting positioning marketing is a core concept in modern-day marketing. Without it, marketing campaigns would be generic, have little to no personalization, and overall would not be able to convert at a level most businesses would deem effective.
Table of Contents: 1. What is STP marketing 2. The STEP formula 3. Benefits of STP marketing 4. How to build an STP marketing strategy. STP marketing is an acronym for Segmentation , Targeting , and Positioning — a three-step model that examines your products or services as well as the way you communicate their benefits to specific customer segments.
In a nutshell, the STP marketing model means you segment your market , target select customer segments with marketing campaigns tailored to their preferences, and adjust your positioning according to their desires and expectations.
STP marketing is effective because it focuses on breaking your customer base into smaller groups, allowing you to develop very specific marketing strategies to reach and engage each target audience. STP marketing represents a shift from product-focused marketing to customer-focused marketing. This shift gives businesses a chance to gain a better understanding of who their ideal customers are and how to reach them.
In short, the more personalized and targeted your marketing efforts, the more successful you will be. This formula clearly illustrates that each segment requires tailored positioning and marketing mix to ensure its success. The first step of the STP marketing model is segmentation. The main goal here is to create various customer segments based on specific criteria and traits that you choose. The four main types of audience segmentation include:.
Step two of the STP marketing model is targeting. Your main goal here is to look at the segments you have created before and determine which of those segments are most likely to generate desired conversions depending on your marketing campaign, those can range from product sales to micro conversions like email signups. Your ideal segment is one that is actively growing, has high profitability, and has a low cost of acquisition:.
The final step in this framework is positioning, which allows you to set your product or services apart from the competition in the minds of your target audience. There are a lot of businesses that do something similar to you, so you need to find what it is that makes you stand out. All the different factors that you considered in the first two steps should have made it easy for you to identify your niche. There are three positioning factors that can help you gain a competitive edge:.
The most successful product positioning is a combination of all three factors. One way to visualize this is by creating a perceptual map for your industry. Focus on what is important for your customers and see where you and your competitors land on the map. With personalization :. Their reasons? Finally, STP marketing levels the playing field. STP marketing has been around for a long time — and it has been effective for just as long.
Back in the s, when Pepsi-Cola was trying to claim some of the market share from Coca-Cola, Pepsi used segmentation to target certain key audiences.
They focused on an attitude and loyalty segmentation approach and divided the market into three consumer segments:. Pepsi had always focused their marketing efforts on the third segment , as it was the most attractive and had the highest return on investment.
Focusing on customers loyal to Coke was considered a waste of time and money, as they were unlikely to change their purchasing habits. Sensing the change in consumer sentiment, Pepsi began targeting loyal Coke drinkers. The rival brand also refocused its positioning — Pepsi started drumming up the fact that Coca-Cola, supposedly, changed its classic Coke with New Coke to resemble more the taste of Pepsi.
Pepsi was able to use STP marketing strategies to increase their market share and convert Cola-loyal customers to Pepsi-lovers. We covered the three stages of the STP marketing model, looked at the benefits and examples of this approach. While this provides you with an excellent overview of the concept, we want to get into the detail of creating an STP marketing strategy that serves your business.
The global market is far too big and far too vast for anyone — even the biggest corporation with the most resources — to address. Think of it as an iceberg. SAM is is the portion of the total available market that fits your product or service offering. Because their service offering was targeted more at the budget travelers who were using online booking engines to find their stay. Similarly with a consumer product, we can look at Diet Coke and say that its TAM would include the total beverage market.
Each segmentation variable helps you tap into a different aspect of your audience and when you use them in unison you can create niche segments that really make an impact on your overall marketing effort. For example, if you split your serviceable obtainable market into men vs women demographic variables you are still left with a pretty broad audience segment.
However, if you start layering other segmentation variables on top, you can create a precise audience that you can make the biggest impact on. Perhaps you go after women demographics in the United States geographics who prefer to spend money on luxury products psychographics who follow you on social media or have visited your website in the past behavior.
As you can see, this layering method creates a hyper-focused audience segment that allows you to create an extremely personalized experience. And as we mentioned before, personalization has a huge impact on the success of your marketing efforts. Segment profiles are very similar to your ideal customer personas but they act as subsets of your main persona — they are detailed descriptions of the people in each segment.
Describe their needs, behaviors, demographics, brand preferences, shopping traits, and any other characteristics. Each profile should be as detailed as possible to give you and your business a good understanding of the people within each segment. This will allow you to compare segments for strategy purposes. Cross-referencing your findings with available market data and consumer research will help you assess which of your constructed segments can bring in the biggest return on your investment.
Consider factors like segment size, growth rates, price sensitivity, and brand loyalty. With this information, you will be able to evaluate the overall attractiveness of each segment in terms of dollar value.
Now that you have detailed information on all of your segments, you need to spend some time deciding which ones are the most viable to use as your target audiences. The best way to determine the most viable segment is by performing cluster analysis. Quite a complex and technical topic on its own check out this guide to get more insights , clustering in the context of eCommerce segmentation means using mathematical models to identify groups of customers that are more similar to one another than those in other groups.
Your ideal audience segment is one that is both large and still growing, and you are able to reach with your marketing efforts. Next, you need to develop a positioning strategy that will give you the best edge to compete in the selected target audience. Determine how to effectively position your product, taking into account other competitors — focus on how your positioning can win the largest amount of the market share.
The last and final step in this long and winding process is to actually implement your strategy. A carefully-curated marketing mix will ensure business success.
However, if you do leave gaps in it, all the precious work you did at the previous stages might go to waste. Your goal is to position it as a high-end addition to their skincare routine that targets concerns related to mature and aging skin.
You also make sure to price the product accordingly so it indicates the luxury category. However, your packaging is cheap and poorly designed, while the product itself is sold in drugstores. Using the STP process, businesses can identify their most valuable customer segments and create products and marketing communications that target those customers.
This helps you create engaging, personalized marketing campaigns that convert visitors to customers at a high rate. With the STP process, you segment your market, target your customers, and position your offering to each segment.
STP marketing is important because it focuses on creating precise market segments and positioning products and services to match their needs, wants, and expectations.
View All Clients Case Studies. Free Demo. Search Yieldify. Segmentation The first step of the STP marketing model is segmentation. The four main types of audience segmentation include: Geographic segmentation : Diving your audience based on country, region, state, province, etc.
Demographic segmentation : Dividing your audience based on age, gender, education level, occupation, gender, etc. Behavioral segmentation : Dividing your audience based on how they interact with your business: What they buy, how often they buy, what they browse, etc. Targeting Step two of the STP marketing model is targeting.
Your ideal segment is one that is actively growing, has high profitability, and has a low cost of acquisition: Size : Consider how large your segment is as well as its future growth potential. Profitability : Consider which of your segments are willing to spend the most money on your product or service.
Determine the lifetime value of customers in each segment and compare. Reachability : Consider how easy or difficult it will be for you to reach each segment with your marketing efforts. Consider customer acquisition costs CACs for each segment. Higher CAC means lower profitability. Positioning The final step in this framework is positioning, which allows you to set your product or services apart from the competition in the minds of your target audience.
There are three positioning factors that can help you gain a competitive edge: Symbolic positioning : Enhance the self-image, belongingness, or even ego of your customers. Experiential positioning : Focus on the emotional connection that your customers have with your product, service, or brand. Consumers with a positive attitude to both brands, with loyalty to both, who switched their purchases between both brands. Stay Updated Be in the know.
Subscribe to our resources.
Suppose you've created a great new offering you hope will become a hot seller. Before you quit. In other words, in terms of your potential buyers, not all of them are "created equal. Other people might be interested if they simply are aware of the fact. After all, your marketing budget is. Once market segments are identified, the next step is to identify which of those segments, if any,. Distinguish between targeted marketing and mass marketing and explain what led to the rise of each.
STP marketing is one of the most popular strategic marketing modules used by businesses today, and for good reason. The STP model is an excellent embodiment of the gradual change in focus from a product-centric approach to a customer-centric approach, which enables companies to better understand who they are trying to reach and how to position themselves for success. Read on as we attempt to answer any and all questions you may have about STP marketing, STP strategies, and anything else you may need to know in order to apply these tactics yourself. STP marketing stands for segmentation, targeting, and positioning. It is a three-step process that allows for the development of a specific and actionable marketing strategy. The main principle behind the process is to segment your audience, target each segmented group according to their preferences and habits, and make positioning adjustments in your branding and marketing strategies to accommodate their needs and expectations. The reason why the segmentation-targeting-positioning process is so effective is that it breaks down broader markets into smaller parts, making it easier to develop specific approaches for reaching and engaging potential customers instead of having to use a generic marketing strategy that would not be as appealing, or as effective.
STP Marketing: Segmentation, Targeting & Positioning Analysis
Target marketing involves breaking a market into segments and then concentrating your marketing efforts on one or a few key segments consisting of the customers whose needs and desires most closely match your product or service offerings. A bed-and-breakfast business, for example, could target married Facebook followers with an ad for a romantic weekend getaway package. LinkedIn, on the other hand, is more B2B oriented, so you can target businesses using a variety of criteria such as number of employees, industry, geographic location, and so on. Demographic grouping is based on measurable statistics, such as:.
Target marketing is essential to getting the most from your marketing dollars by reaching out specifically to those who are most likely to buy your products or services; they are your target market or target audience. The three activities of a successful targeting strategy that allows you to accomplish this are segmentation, targeting and positioning, typically referred to as STP. According to an Entrepreneur article describing target markets, your target market consists of those people most likely to buy from you, but markets have become so differentiated that it's not enough to target an age group or any other single factor. Not everyone in any age group is buying the same things; they have many different opinions, interests and needs. An age group may make sense for your marketing purposes, but age can only be one part of it.
Target marketing can be your key to increasing sales
It is also vital when aiming at reaching the corporate customers in order to offer them thorough information about the Prius Krzykowski, Conclusion A monitoring and assessment team will be put in place to oversee the progress of Toyota in achieving the marketing strategic objectives. The short term objectives will be clearly assessed and where targets are attained, corrections are done since they help in realizing long term objectives. Presently, Toyota has ensured that hybrid vehicles are being manufactured, and so far the market has been developing in terms of overall reaction to these new brands of cars. They have survived merely due to using a model of business that has sustained them. The Target Company will need to make the necessary changes that will heighten the customers shopping experience.