STP Marketing can be used to assess how you communicate the advantages and value of your product to various segments and improve product offerings. The acronym STP stands for the following three steps in marketing strategy
- Segment the market,
- Target the best customers, and
- Position the offer.
For example, a smartphone company may distribute its customers into specific age groups, such as teenagers, adults, and seniors. They can then determine which product features will best suit their target audience based on the target market. Finally, they will position their product in the market by emphasizing its benefits and value.
What is STP Marketing?
The STP Marketing is a three-step marketing process that includes segmentation, targeting, and positioning. This approach examines your product or service and how you market its benefits to certain client segments.
In addition, STP Marketing is gradually increasing the size of the market, sending marketing campaigns to specific groups of customers based on their preferences, and repositioning the brand to alleviate their concerns.
With this methodology, the most expensive customers can be identified. Following that, you will be able to create unique products and advertisements for each team. This method can increase interaction with your target audience, make your message more unique, and increase the number of sales.
Why STP Marketing?
STP Marketing lets you to segment your consumer base into smaller groups, allowing you to design marketing programs suited to each demographic and effectively reach and engage them.
According to Yieldify, 75% of buyers want to acquire products from firms that provide tailored digital experiences.
According to a Salesforce survey, 74% of Gen Z are interested in personalized products, which is higher than Gen X, Gen Y, and Baby Boomers.
STP Marketing prioritizes customers over products. This shift assists businesses in better understanding their ideal clients and how to effectively approach them. The likelihood of success increases by adapting marketing efforts to customer preferences.
Who created STP Marketing?
Phillip Kotler, the S.C. Johnson & Son Distinguished Professor of International Marketing at Northwestern University’s Kellogg School of Management, created STP Marketing.
He is a well-known marketing expert who has authored numerous books, including the eleventh edition of “Marketing Management.”
How can STP Marketing help companies?
In a highly competitive market, only few businesses can thrive. Having a tiny market share in a specific market, on the other hand, can improve profitability. Businesses can grow by catering to a diverse collection of people with varying requirements or desires.
Adapting to changing client needs can boost customer happiness, which can lead to long-term business growth and profits.
Using Segmentation, Targeting, and Positioning (STP) to Develop a Marketing Strategy!
Many marketing managers consider STP Marketing, which stands for Segmentation, Targeting, and Positioning, to be a widely used approach in modern marketing.
STP Marketing identifies the most valuable customer segments and creates customized marketing strategies for each of them. Advances in marketing technology have made it easier to segment, target, and position effectively, which results in a more efficient business.
It is crucial to assess your customer engagement, conversion, and retention, regardless of your experience level, to use STP correctly.
STP Marketing as a Planning Tool
Marketers can better reach their desired audience by using product-focused strategies, such as positioning, segmentation, and targeting.
For strategy and planning, STP Marketing is essential. It impacts the type of customers you reach, interact, convert, and engage.
How to Implement STP Marketiing
1. Segment the Market
To effectively meet the needs of different customers, it is important to use market segmentation. This means dividing customers into groups based on similar characteristics and needs. By customizing your approach for each group, you will have an advantage over competitors who use a universal approach for all customers. You can segment your target market in various ways
2. Target the Right Consumers
After segmenting the market, you must determine which client categories have the highest value and begin targeting them correctly.
To determine which group will earn the most profit, you must first determine which group will generate the most profit. There are numerous aspects to consider while making this decision.
- Profitability of each segment: Which customer groups increase your revenue the most?
- Is the market large enough to be profitable? Consider the size and growth prospects of each customer group. Will the market continue to grow? How does it compare to other market segments? It is critical to ensure that focusing on smaller markets will not reduce revenue.
- Are there any social, legal or technological factors that could affect our operations? How well can your company serve this market? To find opportunities and threats, it is helpful to conduct a PEST analysis for each segment.
3. Position the Offer
To effectively target valuable customer segments, you must define a functional positioning strategy for your product. In addition, you must choose which marketing mix will be most effective for each targeted segment.
To attract potential customers, it is important to highlight your product’s distinctive advantages and characteristics compared to competitors when making decisions regarding the product positioning map.
To improve product positioning, start by figuring out its unique selling points. Then, create a positioning map to see how different customer segments perceive your product. This will make it possible to make informed decisions on how to position the product effectively.
To better understand the wants and needs of different groups, identify the problem that your product solves for them. Then, craft a clear value proposition that highlights how your product addresses this problem better than the competition, and develop a marketing campaign that effectively communicates this value proposition to the target audience.
Applying Positioning, Segmentation, and Targeting in Digital Communications
Digital Marketing requires a strategy that combines positioning, targeting, and segmentation. It is essential to create content with a clear purpose and specific to the target customer group.
Digital Marketing, just like in STP Marketing, can use marketing personas to increase the relevance of communication on a tactical level. This can be observed through different email segmentation methods.
Before starting an online campaign to attract customers, it is very important to understand their behavior on the internet. This includes knowing the platforms and channels they use, how much time they spend on the internet, and what type of content catches their attention. Utilize this knowledge to create campaigns that match the preferences of the target customer segment.
STP Marketing Case Study and Example
Let’s look at some examples to know the functions of segmentation, conducting target market research, and analyzing positioning factors to understand the STP Marketing process.
1. STP Marketing Walmart
Walmart is one of the prime examples of a market leader that prioritizes positioning, segmentation, and targeting. They want to provide high-quality goods to all family members at reasonable prices.
Therefore, Walmart must market to a diverse group of customers who have various wants and tastes. To target customers who are more likely to shop at their stores, they also use lifestyle and demographic segmentation to target customers based on age, income, gender, and other factors.
In addition, Walmart has successfully portrayed its goods as cheap and accessible, so they can attract consumers who may be on a budget or who simply want to find the best price for a product by continuing to offer low prices. In addition, thanks to collaborations with well-known brands such as Coca-Cola and Tide, Walmart is able to provide consumers with a large selection of reliable goods. This makes it easier for consumers to find what they need without sacrificing quality. Walmart, one of the largest retailers in the world, has successfully implemented a successful STP strategy.
2. STP Marketing Airbnb
Airbnb is a great example of how you can use STP Marketing to your advantage, they have targeted and positioned themselves effectively by focusing on the traveler demographic.
Airbnb can attract people who are looking for an affordable option to traditional accommodation while still enjoying the comforts of home. Airbnb also offers a variety of price ranges, making it easy for customers to find what they are looking for within their budget.
Moreover, by offering listings in over 191 countries and regions around the world, Airbnb has become the premier platform for unique accommodations and experiences, helping visitors find accommodations in places they may have never dreamed of. Airbnb has become a global brand known for its successful STP Marketing strategy.
3. STP Marketing Starbucks
Starbucks is another company that has implemented a successful STP strategy. They have been positioned as the ultimate destination for coffee drinkers looking for a high-quality experience, drinks, and snacks.
They are able to attract a wide range of customers by providing a variety of products and services to meet different needs. In addition, Starbucks offers loyalty programs to reward loyal customers and attract them back.
They also appeal to those who just need to relax from their day or want to socialize with friends. Starbucks has become one of the world-famous brands thanks to the successful utilization of STP strategies.
Benefits of STP Marketing
Marketers can use the STP (Segmentation, Targeting, and Positioning) approach to create customized and effective marketing communications.
You can create personalized messages that appeal to the specific segments you have chosen to target rather than delivering broad messages that appeal to a broad audience. Marketing campaigns can increase target audience engagement, sales conversion rates, and brand loyalty.
As with any marketing process, marketing analytics plays an important role in accurately creating and analyzing market segments for STP in marketing. Marketers will need marketing analytics software that can thoroughly examine behavior and demographic information to create effective marketing campaigns.