What is STP in Marketing?
STP stands Segmentation, Targeting and Positioning
STP is a process where a marketer:
- Segments an overall market,(segmentation)
- Evaluates each market segment on a set criteria,
- Selects the most appropriate target market/s for the firm,
- Then establishes an appropriate positioning in order to compete in that target market,
- Which would then be supported by the firm’s marketing mix elements.
Quick study notes
Market Segmentation is defined as:
- The process of splitting a market into smaller groups with similar product needs or identifiable characteristics, for the purpose of selecting appropriate target markets.
Targeting (or target market selection) is defined as:
- An organization’s proactive selection of a suitable market segment (or segments) with the intention of heavily focusing the firm’s marketing offers and activities towards this group of related consumers.
Positioning is defined as:
- Positioning is the target market’s perception of the product’s key benefits and features, relative to the offerings of competitive products.
Main steps in the STP process are:
1. Define the market of interest
2. Use segmentation bases to create market segments
3. Evaluate the segments against criteria of factors
4. Construct segment profiles and measures
5. Evaluate the attractiveness of each segment
6. Choose the most appropriate target markets, from the list of possible segments
7. Develop an appropriate positioning strategy for the target market
8. Develop and implement the marketing mix
9. Review performance, over time
STEP (Segmentation plus Targeting Equals Positioning)
As a word (STEP), this concept should become easier to recall. And the inclusion of the term ‘Equals’ will help you recall that each selected target market requires its own positioning and marketing mix.