Learn about STP marketing and how to incorporate the STP (segmentation, targeting, and positioning) model into your marketing strategy to achieve growth.
STP marketing is the practice of using the STP (Segmentation, Targeting, and Positioning) model to develop marketing strategies centered on customers, as well as discovering and optimizing marketing for your target audience and segment.
The STP model has proven to be one of the most important marketing models that marketers can use to improve their marketing strategies, planning, and results since its inception.
In our businesses, the STP model assists us in applying marketing principles, the marketing mix, and designing marketing plans.
First, let’s go over what the STP Model in marketing is all about. Second, we’ll go over each component of the STP model individually, look at its role in digital marketing, and finally see how you can use it to make better marketing decisions in your company.
Table of Contents
What exactly is the STP (Segmentation, Targeting, and Positioning) Model?
The STP model is used to create marketing segments in which companies can gain a competitive advantage to use in their marketing strategies.
The model assists us in identifying our most optimal target audiences and segments, determining which segments are the best for us, and positioning our business to those segments.
The STP model is derived from the three steps of segmentation: segmentation, targeting, and positioning.
Marketing STP Model
The goal of the STP model and its application in marketing is to identify profitable marketing segments and target audiences for marketing activities.
Using the STP model to create a marketing strategy, we build marketing strategies that focus on the target audiences we want to reach and develop and position products in the most optimized way.
The model’s advantage is that it paints a picture of our most valuable customers as well as methods for developing better products and marketing strategies.
Understanding our online audience is critical for online marketing strategies in digital marketing; the STP model helps us deliver marketing wins more consistently.
What Is STP Segmentation In The STP Model?
In a nutshell, segmenting in the STP model refers to the methods and actions we use to divide a larger market opportunity into smaller, more detailed segments, whether through research or analytics.
When we understand who we are selling to, we have a better chance of gaining a competitive edge through our products or from a pure marketing standpoint.
And the reason for segmentation is obvious: a company cannot offer its products to everyone equally.
While segmenting is useful for understanding the core characteristics of your chosen segments, the way we create the segments can limit our potential market opportunity if we dilute the segments too much.
For example, the smaller the segment, especially an unprofitable and small segment, the more unrealistic it is for a company to achieve. Starting in small or niche segments, on the other hand, can provide a place to start and grow new businesses.
Before we can segment, we need to understand the role of the business goals and whether a segment can help us get there.
We must define realistic market segments that a company can serve.
Creating and Identifying Customer Segments
But first, we must define the customer segments. We can shape a segment in a variety of ways, including demographics, geography, psychographics, behavioral characteristics, and data.
Demographic :
Age, marital status, gender, employment education, and income are all factors to consider.
Geographic and online visibility:
Country, regions, cities, and communities
Online channels: which channels are the segments most likely to use? (social media, search, etc. )
Psychographic:
Values, personality, way of life, attitudes, and interests
Characteristics of behavior:
How does the segment make use of products?
What do they hope to gain from the products?
What they do on your online platforms (website analytics)
In our case, we use targeting from the STP model to determine how realistic a segment is.
What Is STP Targeting In The STP Model?
After we’ve created our segments, we must decide which ones will work best. In the STP model, targeting refers to selecting the appropriate segments to target and planning marketing activities.
The goal of targeting is to investigate each segment’s business opportunities and select the one that best aligns with our objectives.
While it is tempting to achieve growth in multiple segments at the same time, it is rarely possible. As a result, we must first identify the best segment.
By focusing on one segment at a time, we can develop more measurable strategies to determine whether the segment delivered the results we expected. Because online marketing moves at such a rapid pace, we can quickly target different segments.
We can use the following questions to assess the quality of the segments we create and whether it is worthwhile for us to do so.
Measurability:
What is the segment’s size?
Purchase Habits
Segment requirements
Accessibility:
Can we communicate with the segment (for example, through advertising)?
How frequently can we communicate?
How much does it cost?
Marketing channels that are required
Sustainability:
Is the segment profitable enough to justify continued marketing efforts?
Is the segment in line with our business objectives?
Can we realistically and sustainably provide value to the segment?
Actionability:
Can we maintain our segment’s competitive advantage?
Can we communicate in the way that the segment prefers?
What Does Positioning Mean in the STP Model?
Position in STP is all about developing products and marketing them to a marketing segment you’ve created. It is also the final step in the model’s development process.
And, as the final step, it is the most important. Because we cannot succeed with our marketing strategy unless we understand how to position our offering to the targeted segments.
You can use the following tools to determine the positioning:
Understand your segment’s USP (unique selling point).
Map of Positioning
Your customers’ (and the segment’s) problems, and the solutions you provide, should address the wants and needs of the segments you target.
What is the value proposition that gives you a competitive advantage over your segment competitors?
When we understand how to position ourselves in the segments and tailor our offering to the needs of our target audience, we’ll have a solid foundation from which to propel our marketing efforts forward and achieve growth.
During the positioning phase, you can introduce competing companies and brands into the mix to see where you stand to them in the chosen segments. It should assist you in better identifying your USP and determining whether you need to reconsider it.
Marketing results will be improved for the company that can meet the segment’s needs and desires.
STP: How Effective Is It in Digital Marketing?
The STP model, particularly in digital marketing with online marketing methods, can assist in determining the best audiences and market segments to target.
What digital marketing enables is rapid experimentation with data for segment determination, as we can construct a segment of the data we have at hand either through research or by molding it.
It provides a quick way to test whether a segment responds to our marketing efforts in the way we intended.
It means we can quickly go through many real-life marketing segments and determine whether we have properly identified a target audience.
Using STP in digital marketing allows for the creation of more segments through its methods, resulting in more accurate marketing data.
Whether you create market segments through research or in-depth analytics, the STP model can help us make more precise decisions.
Another great point is that because of the low cost of entry and the time required to run the test, we can experiment with smaller segments in digital marketing. We can discover new opportunities within market segments that we previously did not perceive to be large enough or profitable.
Digital marketing segments, like traditional marketing segments, must be data-driven, precise, and profitable in large-scale use.
To summarize, STP marketing has a wide range of applications in digital marketing.
Segment Experimentation
As a company begins to identify its primary customer segments, many will discover a few that are worthwhile and properly position themselves.
In reality, discovering the working segments comes down to experimentation.
If we don’t have any existing customer data to fall back on when we start planning our segments, we must rely on experimentation to discover the best segments.
Fortunately, in many digital marketing strategies, you will be able to effectively test different segments via various targeting options.
For example, in Google Ads or Facebook Ads, you could test with interests and demographic data.
The goal of the experiment is to give you a better idea of how to find your best segment.
Returning to the model, you can test the feasibility by experimenting while creating the segments. And, by experimenting with a variety of segments at the same time, you can narrow down the best ones using the targeting method.
However, because we are discussing the use of advertising methods to extract data, the more initial data (such as web behavioral data) you have about your segments, the better the results you will have.
That is, to gain the most, you should first use the STP model to identify the best segments, and then experiment further to see if you were correct in assuming that the segments work for you.
It would be advantageous to have a large amount of customer data on hand to create data-driven segments for further experimentation.
For example, identifying the top 10% of your customer base and developing a segment based on the characteristics of the top 10% of your customer base.
Conclusion
Using the segmentation, targeting, and positioning (STP) model to build target audiences for marketing, whether for traditional or digital marketing, is an effective strategy for marketers to experiment with to get better marketing results.
The core is to identify the most profitable segments and position your products and surrounding marketing to meet the needs of the segment.
In essence, a large corporation can use the STP model to identify profitable market segments and embed its competitive advantages into core marketing strategies.
Startups and small businesses can use the model to identify market segments in which to excel and chart a growth path.
In modern marketing, where experimentation leads to improved marketing results, having a clear picture of your potential customers and verifying it with data is critical, and the STP model assists in identifying it.
