STP Process Marketing: A Guide to Segmentation, Targeting, and Positioning

Anni-Louise BossauerOct 30, 2024

The STP process in marketing stands for Segmentation, Targeting, and Positioning. It’s one of the most effective frameworks marketers use to refine their strategies, reaching the right audience with the right message. Through STP process marketing, companies can identify specific customer groups, create tailored marketing campaigns, and strengthen brand positioning to gain a competitive advantage.

In this guide, we’ll explore each step of the STP process in depth, provide practical examples, and discuss how businesses can apply the framework to optimize their marketing efforts.

What Is the STP Process in Marketing?

The STP process marketing framework involves three crucial steps: segmentation, targeting, and positioning. Together, these steps allow brands to break down their audience into groups, choose which groups to focus on, and position their products in a way that resonates with those chosen segments.

Each step has its unique role:

Segmentation: Dividing a broader market into smaller, more manageable groups.
Targeting: Selecting the segment(s) to focus on for marketing efforts.
Positioning: Crafting the brand message and product offering to meet the specific needs of the target market.

The STP model offers companies a structured way to understand and address customer needs, making marketing campaigns more effective by ensuring that content and products resonate with the intended audience.

For a deeper dive into understanding customer behavior, check out how marketing affects consumer behavior to learn how this knowledge complements segmentation efforts in the STP process.

Step 1: Segmentation in the STP Process

The first step in STP process marketing is segmentation, which involves dividing a broad market into smaller groups of customers with similar needs or characteristics. Segmentation helps marketers identify groups based on demographics, psychographics, geographic location, or behavior, allowing for more precise marketing.

Types of Market Segmentation

Demographic Segmentation Divides the market based on age, gender, income, education, or occupation. For instance, a skincare brand may create separate product lines for different age groups, understanding that skincare needs vary by age.
Psychographic Segmentation Focuses on customers’ lifestyle, interests, values, or personality. Brands targeting environmentally conscious consumers, for example, may emphasize eco-friendly products or sustainable practices.
Geographic Segmentation Groups customers based on their physical location. Location-based marketing is common in industries like retail, where preferences and purchasing behavior can vary significantly by region.
Behavioral Segmentation Considers consumer behavior, such as buying habits, brand loyalty, and product usage. For example, airlines often segment customers by loyalty programs, offering exclusive benefits to frequent flyers.

Through segmentation, businesses can better understand their potential customer groups, setting the stage for effective targeting.

For an in-depth look at related functions, explore our guide on 7 essential marketing functions that enhance the segmentation phase.

Step 2: Targeting in the STP Process

Once the market is segmented, the next step in STP process marketing is targeting. Targeting involves evaluating each segment’s potential and choosing one or more to focus marketing efforts on. By targeting specific segments, businesses can allocate resources more effectively and tailor campaigns that directly speak to the needs of their chosen audience.

Approaches to Market Targeting

Undifferentiated Marketing Uses a single marketing approach for all segments, which can be cost-effective but may lack personalization. This strategy suits companies offering products with universal appeal.
Differentiated Marketing Creates different marketing strategies for each segment. This approach allows businesses to cater to each group’s specific preferences, although it often requires a higher marketing budget.
Concentrated Marketing Focuses all marketing efforts on a single, specific segment, ideal for niche markets. For example, a brand specializing in high-end running shoes may only target professional or avid runners.
Micromarketing Tailors marketing efforts to very specific, narrow groups or even individuals, such as local stores targeting customers in their immediate area.

The choice of targeting approach depends on a company’s product, goals, and available resources. Brands looking to build loyalty and long-term relationships may benefit from more focused approaches like differentiated or concentrated marketing.

To explore strategies for reaching audiences, our article on 7 content marketing trends provides insights into adapting messaging for different target groups.

Step 3: Positioning in the STP Process

The final step in STP process marketing is positioning. Positioning involves defining how a brand wants its product to be perceived in the target customer’s mind. Successful positioning differentiates a brand from its competitors and communicates unique benefits that resonate with the target audience.

Positioning Strategies

Product Attributes
Positioning based on product features or quality, such as a smartphone marketed for its high-resolution camera.
Benefits
Focusing on specific benefits the product provides. For example, a protein bar brand might position itself as an ideal snack for fitness enthusiasts.
Use or Application
Some brands position products based on their ideal use or application. For instance, athletic brands may target professional sports players with gear designed for high performance.
Competitor-Based Positioning
In competitive markets, brands may position themselves as an alternative to specific competitors. This approach involves highlighting differences, like a ride-sharing service promoting lower prices than its main competitor.
Cultural Symbolism or Value-Based Positioning
For brands looking to resonate emotionally, this positioning taps into cultural symbols, values, or identity, such as eco-friendly brands emphasizing sustainability.

Crafting a unique value proposition is key to positioning. Brands should clearly communicate why customers should choose them over competitors, creating a compelling reason to buy.

If you’re interested in learning more about brand positioning techniques, check out our guide on creating a successful marketing and branding strategy for practical tips.

Benefits of the STP Process in Marketing

Implementing the STP process marketing offers several advantages, from increased customer satisfaction to improved resource allocation. Here’s a closer look:

Enhanced Customer Satisfaction By understanding and targeting specific needs, brands can tailor their offerings, leading to higher satisfaction and loyalty among customers.
Efficient Use of Resources Rather than a broad approach, STP allows companies to allocate marketing budgets and resources to segments with the highest potential, resulting in cost-effectiveness and better ROI.
Stronger Competitive Positioning By clearly defining target segments and crafting messages that resonate, brands can stand out against competitors, strengthening their market position.
Improved Brand Loyalty Customers are more likely to stay loyal to brands that understand and cater to their needs. With STP, companies can build lasting relationships by consistently delivering value.

For businesses focusing on long-term success, our article on the 6 new-age marketing principles outlines modern approaches to customer-centric marketing, aligning well with STP goals.

Myth Busters: Common Misconceptions About the STP Process

Even though the STP process marketing is widely used, there are some misconceptions that can impact its effectiveness:

Myth #1: STP Is Only for Big Companies
While larger companies often use STP, it’s equally valuable for small businesses. Even with a limited budget, small businesses can benefit from targeted marketing to build a loyal customer base.
Myth #2: All Segments Need to Be Targeted
In reality, focusing on a few high-potential segments can be more effective than trying to reach everyone. The STP process encourages quality over quantity in customer relationships.
Myth #3: Segmentation and Targeting Are the Same
Segmentation divides the market into groups, while targeting involves selecting the most relevant segments for marketing efforts. These steps are distinct but complementary within the STP framework.

Breaking down these myths can help marketers better apply the STP model. For those interested in understanding effective customer targeting, our article on content marketing formats winning with marketers provides practical insights for segment-focused content strategies.

Conclusion: Making the Most of the STP Process in Marketing

The STP process marketing framework enables companies to create highly targeted and effective marketing strategies. By segmenting the audience, choosing segments with the greatest potential, and positioning the brand in a way that resonates, businesses can optimize their marketing efforts and build stronger connections with customers.

Applying STP requires a clear understanding of customer needs and how the brand can meet those needs uniquely. For marketers and business owners, adopting the STP framework can improve the clarity of marketing strategies and enhance overall campaign success.

For further guidance on launching or refining your STP strategy, consider our detailed guide on how to start a business that thrives, which covers essential steps for setting up effective operations, including marketing foundations.