STP Marketing
The Better the Fit, The Greater the Value.
The STP Marketing model – Segmentation, Targeting, and Positioning – provides a highly effective approach to strategic marketing and business growth. Market segmentation, targeting, and positioning enable organizations to clearly understand how to serve current and potential markets.
STP Marketing is extremely beneficial in today’s severely competitive, information-overloaded, and rapidly changing global business environment by enabling:
- Alignment of product and service offerings with markets that value their Features, Advantages, and Benefits (FAB).
- Crafting tailored messaging and value propositions for specific audiences.
- Development of competitive advantages to clearly differentiate your brand and offerings.
STP identifies opportunities and clarifies the balance between products and markets. It is the primary driver of a customer-focused marketing strategy, and vital to product-focused marketing.
Society as a whole is overloaded with information and often confused by the vast array of choices available for just about anything and everything. This is clearly evident in the simplest of everyday activities,
- A keyword search will generate thousands of results
- Email inboxes are flooded with unsolicited emails trying to promote a product or service
- Social media is bombarded with advertisements and posts for various brands and product offerings
People have learned to look past information that is not specifically focused on their interests, needs, or desires. This is true in business and personal purchasing behaviors.
STP marketing strategies provide a highly effective framework for aligning marketing activities with the audiences that are most likely to respond. The foundation for generating business growth.
What is STP Marketing?
STP marketing is a marketing strategy that involves dividing a larger market into smaller, more manageable segments (segmentation), selecting one or more segments that the business will focus on (targeting), and then developing marketing strategies and tactics to effectively reach and engage with those target segments (positioning).
The STP acronym stands for:
- Segmentation: The process of dividing a larger market into smaller groups of customers who have similar needs, interests, and behaviors.
- Targeting: The process of selecting one or more specific market segments to focus on based on their potential for profitability, growth, and the business’s ability to serve their needs.
- Positioning: The process of developing marketing strategies and tactics to effectively reach and engage with the target market segments, with the goal of establishing a unique and favorable position in the minds of those customers.
By using STP marketing, businesses can more effectively tailor their marketing efforts to the needs and preferences of specific customer segments, improving their chances of success and profitability. STP marketing also helps businesses differentiate themselves from competitors and build stronger relationships with their customers, ultimately leading to greater success and long-term growth.
Segmentation, Targeting, and Positioning Strategies
What is market segmentation?
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. Markets can be segmented based on just about any criteria, factor, or behavior. Segmentation criteria may include demographics such as age, gender, income, and education level, as well as psychographics such as lifestyle, personality, and values. Other segmentation variables may include geographic location, behavior patterns, and product usage.
The most commonly used criteria for segmentation are:
- 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 market segment 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.
Once a business has identified its target segments, it can design marketing campaigns and develop products that appeal to the unique needs and desires of each segment, potentially leading to higher sales and greater customer loyalty.
What are the benefits of market segmentation?
Market segmentation offers several benefits for businesses, including:
- Increased understanding of customer needs: By dividing a larger market into smaller groups based on shared characteristics, businesses can gain a deeper understanding of the unique needs, preferences, and behaviors of their customers.
- More effective targeting of marketing efforts: By tailoring marketing messages and tactics to specific market segments, businesses can more effectively reach and engage with their target audience, leading to more successful marketing campaigns.
- Greater potential for customer loyalty: By understanding and addressing the specific needs and preferences of customers within different market segments, businesses can build stronger relationships with those customers, increasing the likelihood of repeat business and customer loyalty.
- Improved product development: By segmenting a market, businesses can identify unmet customer needs within specific segments, and develop new products or services that are better suited to those needs.
- Better positioning against competitors: By targeting specific market segments that are underserved or overlooked by competitors, businesses can differentiate themselves from competitors and gain a competitive advantage.
Overall, market segmentation is an important tool for businesses to better understand their customers, more effectively target their marketing efforts, and ultimately, improve their sales and customer loyalty. By dividing a larger market into smaller, more manageable segments, businesses can gain a deeper understanding of their customers and build stronger relationships with them, leading to greater success and profitability in the long run.
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 a target market this is a good fit for the product’s features, advantages, and benefits are the equivalent of hitting a bullseye. However, the return is new revenue instead of points, usually achieving greater profit margins.
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.

What is a target market?
A target market refers to a specific group of consumers or organizations that a business aims to sell its products or services to. By identifying and understanding their target market, businesses can tailor their marketing efforts and product development strategies to better meet the needs and preferences of their potential customers, leading to greater success in selling their products or services.
What is market targeting?
Market targeting is the process of selecting and prioritizing one or more specific target markets from the larger group of potential customers that a business could serve. In market targeting, a business evaluates the various market segments it could target based on factors such as the size of the segment, its growth potential, its profitability, the competition within the segment, and the business’s ability to effectively reach and serve that segment.
After evaluating these factors, the business then chooses one or more specific segments that it will focus its marketing and sales efforts on. This involves tailoring the business’s marketing messages and product offerings to appeal to the needs and preferences of the selected target market.
Market targeting is an important marketing strategy because it allows businesses to efficiently allocate their resources by focusing on the segments that offer the greatest potential for revenue and growth. By targeting specific markets, businesses can also differentiate themselves from competitors and build stronger relationships with their customers.
What are the benefits of market targeting?
Market targeting offers several benefits for businesses, including:
- More efficient use of resources: By focusing on specific market segments that are most likely to buy a product or service, a business can save money and time on marketing efforts that are less likely to be effective.
- Increased customer satisfaction: By tailoring their marketing messages and product offerings to the needs and preferences of a specific target market, businesses can improve customer satisfaction and build stronger relationships with their customers.
- Higher sales and revenue: Targeting the most promising market segments can lead to higher sales and revenue, as businesses can better address the specific needs and preferences of those customers.
- Improved differentiation from competitors: By focusing on specific target markets, businesses can differentiate themselves from competitors that may be trying to appeal to a broader range of customers.
- Better positioning for growth: Targeting specific market segments can also position businesses for future growth by helping them understand the unique needs and preferences of their customers, and developing products and services that meet those needs.
Overall, market targeting is a key element of a successful marketing strategy, helping businesses to identify and focus on the most promising market segments and ultimately, to build a stronger and more profitable customer base.
Positioning for competitive differentiation to optimize your value proposition
What makes buyers choose your brand and its offerings over a competitor or alternative solution? A key factor is how your brand and/or products are positioned in the market, and the value proposition presented to the audience in that market. Thus making your positioning strategy crucial.
(We deliver greater value to our clients by developing a unique value proposition for each target market and audience. Thus positioning specifically for the conditions of that market. As opposed to a universal value proposition that is used across the board.
Experience has made it clear that the same product in the eyes of two practically identical buyers, can have a different perceived value. Let’s examine quality and prestige, as they often go hand in hand. However, each is its own unique value proposition and can be the factor that triggers a purchase.
Mercedes Benz is often regarded as one of the highest-rated luxury automobiles in terms of quality, prestige, and other factors. Each provides an opportunity to deliver a unique value proposition.
What is a positioning strategy?
A positioning strategy is a plan or approach that a business uses to create a distinctive and favorable image or identity for a product or brand in the minds of consumers. The goal of a positioning strategy is to differentiate a product or brand from its competitors and create a unique and desirable image or identity that resonates with target customers.
A positioning strategy typically involves identifying the unique benefits and features of a product or brand, as well as the needs and preferences of its target market. Once this information is gathered, the business can develop a strategy that effectively communicates those benefits and features to their target customers in a way that resonates with them.
Effective positioning strategies often involve a clear and compelling value proposition that distinguishes the product or brand from its competitors. This may be communicated through advertising, branding, messaging, product design, and other marketing tactics.
A positioning strategy should be based on a deep understanding of the target market and their needs, as well as an understanding of the competitive landscape. By developing a clear and compelling positioning strategy, businesses can differentiate themselves from competitors and create a stronger connection with their target customers.
What is brand positioning?
Brand positioning refers to the process of creating a unique and distinctive image or identity for a brand in the minds of consumers. The goal of brand positioning is to differentiate a brand from its competitors and create a strong and positive association with target customers.
Brand positioning is often based on a brand’s value proposition, which is defined by benefit(s) or feature(s) of the brand that set it apart from its competitors. The brand’s value proposition should be closely tied to the needs and preferences of the target market.
Effective brand positioning requires a deep understanding of the target market and their needs, as well as an understanding of the competitive landscape. Once a business has identified its brand’s value proposition, it can develop a positioning strategy that effectively communicates the value proposition to target audiences.
Brand positioning can be communicated through a variety of marketing tactics, including advertising, product packaging, brand messaging, and the overall brand identity. By creating a clear and compelling brand positioning strategy, businesses can differentiate their brand from competitors and create a stronger connection with their target customers, ultimately leading to greater success and profitability.
What is product positioning?
Product positioning is the process of creating a specific image or identity for a product or service in the minds of consumers relative to its competitors. The goal of product positioning is to differentiate a product from its competitors and create a unique and desirable image or identity that resonates with target customers.
Product positioning is often based on the benefits and features of a product, as well as the needs and preferences of its target market. A product’s positioning can be influenced by a variety of factors, including its price, quality, design, functionality, and overall value proposition.
Effective product positioning requires a deep understanding of the target market and their needs, as well as an understanding of the competitive landscape. Once a business has identified the unique benefits and features of their product, they can develop a positioning strategy that effectively communicates those benefits and features to their target customers.
Product positioning can be communicated through a variety of marketing tactics, including advertising, product packaging, branding, and messaging. By creating a clear and compelling product positioning strategy, businesses can differentiate themselves from competitors and create a stronger connection with their target customers, ultimately leading to greater success and profitability.
What is the difference between product positioning and brand positioning?
Brand positioning and product positioning are related concepts, but they are not the same thing. Here are the main differences:
- Scope: Product positioning focuses on a specific product or service, while brand positioning focuses on the entire brand and its image.
- Level of abstraction: Product positioning is generally more concrete and specific, based on the features and benefits of a particular product or service. Brand positioning is more abstract and encompasses the overall values, personality, and identity of the brand.
- Time frame: Product positioning is often shorter term, as products can change or become outdated over time. Brand positioning is more long-term and enduring, as it encompasses the overall reputation and identity of the brand.
- Competitive context: Product positioning is often based on a product’s unique selling proposition and how it compares to competitors. Brand positioning also considers the competitive landscape, but it’s more focused on creating a unique and distinctive identity for the brand itself.
In summary, product positioning is more focused on specific products or services and their benefits, while brand positioning is more focused on creating a distinctive and enduring identity for the brand as a whole. Both are important for businesses to effectively differentiate themselves from competitors and connect with their target customers.
The bottom line on STP marketing strategy
In summary, STP marketing strategy is a powerful and effective marketing strategy, regardless of your industry, product, or audience. It prioritizes efficient and effective marketing and ensures you’re delivering a strong value proposition that is aligned with markets that provide the greatest opportunity for revenue growth. It also plays an important role in developing other key strategies, such as content strategy, advertising and promotion strategy, and product strategy.