How Segmentation, Targeting and Positioning (STP) Drive Growth

by | Blog, Strategic Marketing Consulting

The Better the Fit, The Greater the Value

Segmentation, Targeting, and Positioning (STP) form the foundation for business growth. Market segmentation, targeting, and positioning enable organizations to clearly understand how they can serve current and potential markets. They provide a framework for profitable organic growth. STP identifies opportunities and clarifies the balance between products and markets.


Segmentation, Targeting, and Positioning Strategies

Market segmentation is a very powerful method for aligning brands and product or service offerings with customers that will appreciate their value. Segmentation should clearly identify the relevance of an offering to the population in that segment. Offerings should then be developed or existing offerings modified or repositioned to provide relevance and value.

The most effective segmentation strategies are developed with deep insight. Developing a firm grasp of the factors that matter for your offerings and capabilities is crucial. While there are only a handful of segment types, each segment is completely open to definition.

You can segment your audience based on one or more of these criteria:

  • Demographics, which typically answer the question of who your buyer is (e.g. age, gender, education, location, and profession)
  • Psychographics, which answer the question of why your buyer buys (e.g. priorities, personality traits, and beliefs and values)
  • Lifestyle traits, such as hobbies, entertainment preferences, and non-work activities
  • Behavior, such as brand loyalty, channel preferences, and other shopping habits

Define the segment to broadly and your value proposition decreases proportionately. While a narrow definition can create great value, it limits the volume of growth. In addition, the product’s capabilities and features add another dimension of complexity.

We conduct an in-depth analysis of numerous variables to identify the most valuable segments for your capabilities and offerings. Enabling better alignment of resources and target market segments

Targeting the Perfect Product Market Fit

Think of the game of darts, the board is the market, and the darts are the products or services. Aligning a product with the right target market is the equivalent of hitting a bullseye, however, instead of points, the return is profitable growth.

Identifying and penetrating target markets sits at the core of profitable growth. Focusing on the ideal customer for product or service offerings optimizes perceived value and dictates greater margins. Most small and mid-size businesses have limited resources and need to focus on opportunities that will generate the highest return. However, many are afraid that they will lose volume by concentrating on target customers, so they

This strategy is very different from “the one size fits all” mindset where an organization tries to serve as many customer groups as possible. This approach reduces the value of the offering and may even lack appeal, minimizing value and often failing to attract customers.

Segmentation targeting for positioning

Positioning and Differentiation Drive Perceived Value

Begin by examine your product or service through the perspective of your chosen segment.

If you were in their shoes, why would you choose your product over a competitor’s?

What features or benefits are most relevant to target markets, based on their motivations and pain points?

What is segmentation, targeting, and positioning in marketing?

The STP model is a priceless addition to any marketing strategy, regardless of your industry, product, or audience. It prioritizes efficient and effective marketing and ensures you’re delivering only the most relevant, targeted messaging across the board.

It also plays an important role in developing other strategies, such as your buyer personas, customer lifecycle stages, and core brand proposition.

The positioning of an offering must be validated by fulfilling specific criteria, identification of a target market along with an understanding of the potential growth in that market. In addition, what functionality or benefits does the target market seek, and other criteria.

Existing product and service offerings can be altered to position them for new opportunities in different market segments. That product or service offering is revitalized and essentially gain a new life through positioning. By positioning a product or service to fit a target market through modification, creates new opportunities and demand. The development and other costs are greatly reduced if not eliminated while generating additional returns on an existing investment.

STP is a core marketing strategy that creates tremendous value for brands and offerings. We can help your business with STP. We will provide an ROI analysis with our STP to work to prove how significant STP really is. Contact us for more information.