3 Steps of Segmentation, Targeting, and Positioning (STP) Model

Marketing is an important part of any business and it plays an important role in the success of a company. One of the most important marketing strategies is the 3 Steps of the Segmentation, Targeting, and Positioning (STP) Model. The STP Model is a three-step process.

It helps businesses to understand and analyze their target market and create a marketing strategy. It gives effectively reaches their target Customers.

(STP) Model Definition

The STP Marketing Model is a three-step funnel system that examines products or services, target audiences, and marketing messages.

It helps companies to understand how to create and deliver value-based products. And also increases the relevance and personalization of marketing messages to a target audience/customers.

Step 1: Segmentation

The first step of the 3 Steps of Segmentation, Targeting, and Positioning (STP) Model is market segmentation. Market segmentation is the process of dividing a market into smaller groups of customers with similar needs or characteristics.

This allows companies to understand their target market better and create a marketing strategy that effectively reaches their target audience.

There are several ways to segment a market, including:

• Demographic segmentation: dividing the market based on characteristics such as age, gender, income, education, and occupation
• Psychographic segmentation: dividing the market based on personality, values, attitudes, interests, and lifestyle
• Behavioral segmentation: dividing the market based on customer behavior, such as purchase history, brand loyalty, and usage rate
• Geographic segmentation: dividing the market based on location, such as region, climate, and population density

Learn more about the Types of Market Segment

When segmenting your market, it’s important to choose the most relevant method and consider factors. Such as your target audience, product or service offerings, and marketing objectives.

Step 2: Targeting

The second step of the 3 Steps of Segmentation, Targeting, and Positioning (STP) Model is targeting. Targeting involves selecting one or more segments to target with your marketing efforts. This is where you decide which segments of your market to focus on and why.

A firm must look at three key factors to be successful in its marketing efforts: segment size and growth, segment structural attractiveness, and company objectives and resources.

Segment Size and Growth: This will give the firm an understanding of the potential revenue. That can be generated from this market segment. If the segment is large and growing. It will possibly be more attractive to the firm than a segment that is small and shrinking.

Segment Structural Attractiveness: This refers to the level of competition, the presence of substitute products, the power of buyers, and the power of suppliers. A market segment that is structurally attractive will be characterized by low levels of competition, few substitute products, and limited bargaining power of buyers and suppliers. This will make it easier for the firm to gain a competitive advantage and succeed in this market segment.

Company Objectives and Resources: The firm must have the necessary skills and resources to offer superior value. And also gain advantages over its competitors. So this may involve investments in new technology, the development of new products or services, or the hiring of new personnel with specialized skills.

To effectively target your market, consider the following:

• Market size and growth potential: How big is the segment and what is its potential for growth?
• Company strengths and weaknesses: What are your strengths and weaknesses in terms of serving the segment?
• Market trends: What are the current trends in the segment and how can you leverage them to your advantage?
• Competition: Who are your competitors and what are their strengths and weaknesses?

Step 3: Positioning

The final step of the 3 Steps of Segmentation, Targeting, and Positioning (STP) Model is positioning. Positioning involves creating a unique image and value proposition for your product/service in the minds of your target customers. So this is where you differentiate your offerings from your competitors and create a unique and compelling value proposition.

To effectively position your product or service, consider the following:

• Unique selling points: What makes your product or service different from your competitors and why should customers choose it?
• Customer benefits: What benefits do your product or service offer and how does it meet the needs and wants of your target customers?
• Brand image: What image do you want to convey with your product or service and how can you reinforce that image in your marketing efforts?
• Market positioning statement: What is your market positioning statement and how does it accurately reflect