Guide To STP Marketing Segmentation, Targeting And Positioning

We all heard the saying, i.e., “If you want to stand out in a crowded competitor marketplace, you must have a unique positioning.” This statement is especially true in the world of marketing, where the competition is fierce. To stand out from the crowd of competitors, you must have a specifically tailored strategy for targeting and reaching your target market. This is where STP (Segmentation, Targeting, and Positioning) Marketing comes into the picture.

This blog post will explore STP Marketing, the factors you must consider when segmenting, targeting, and positioning your products or services, how to create an effective STP Marketing strategy that never fails, and some frequently asked questions (FAQs).

So, let’s begin.

What is STP Marketing?

STP Marketing is a three-step process in which a company identifies the most desirable consumer segment, designs the right product or service, and positions it in the marketplace to maximize its reach. STP is an acronym for Segmentation, Targeting, and Positioning.

The STP Formula

The easiest way to remember the STP formula is to break it down into three simple steps, which is:



It breaks down your target market into groups or segments based on common characteristics. This will help you understand the needs and behaviors of your customer segments, then create tailored marketing messages that speak to their needs.

Types of segmentation:

It can include,

  • Geographic: It divides the market into regions, countries, states, cities, or neighborhoods.
  • Demographic: It identifies groups of people by age, gender, occupation, income levels, etc.
  • Behavioral: It looks at how customers behave and interact with products or services.
  • Psychographic: It is about the lifestyle, values, attitudes, opinions, and interests of customers. It also looks at the opinions and beliefs of customers.


Once you have identified your segment, you must decide which segment is worth targeting. As such, you need to consider factors like:

  • Size: When deciding on an audience segment, it is essential to ensure that the group has enough potential customers to be worthy of marketing. If you target too small a subset, your investments in the campaign may not pay off with successful conversions. Therefore, consider the total number of people from whom this market could benefit and any smaller subsets before launching your efforts.
  • Profitability: Since the ultimate aim of any marketing campaign is to make a profit, it is essential to consider if this segment could bring in enough revenue. Assessing the buying power and propensity of the customer is critical as this will directly affect your ROI from targeting them.
  • Reachability: You must ensure that you can reach the target segment. This includes evaluating media channels and promotional strategies to ensure your message reaches the right audience. Also, it is vital to consider the frequency and timing of your messages to reach the target segment.


The final step is Positioning. It would be best if you crafted a distinctive and memorable position for your product or service to thrive in the market. Doing so will help you to outshine the competition and make it simpler for customers to remember your brand.

A unique standing can give you an advantage and is critical when striving toward success. Therefore, create a unique message and an appealing brand identity to position your product or service in the market.

Now that you know the steps for STP, let’s discuss the strategy to create it.

How To Create A STP Marketing Strategy That Never Fails?

Define The Market

To begin, you must define the market in which your product or service will exist. You need to understand the industry and its competitive landscape to better position yourself. Research customer demographics, needs, media channels available, and competition within that particular market segment.

To Identify the opportunities, you need to define three types of markets, such as:

  • Total Available Market (TAM)

This market comprises all potential customers of your product or service, offering the most excellent possible opportunity for revenue generation. It would be a remarkably lucrative endeavor for your brand if you could capture 100% of this extensive marketplace!

  • Served Available Market (SAM)

This segment comprises all the customers you can target with your product or service. This segment should include a significant portion of the TAM and represent an attainable opportunity for your organization.

  • Service Obtainable market (SOM)

This set of customers is ideal for your company’s product or service to reach out to and capture. By targeting this segment, you can be sure that your brand will benefit from a significant market share and profit potential.

Identify Your Competitors

Once you have defined the market, determine your competitors and their position in the marketplace. To do this, assess their pricing model, customer loyalty program, advertising campaigns (both online & offline), and other such factors that could impact customers’ purchase decisions.

It would also be beneficial to understand their strengths and weaknesses and use this information to formulate a plan to outdo them.

Create And Identify The Valuable Segment

To effectively reach your target audience, you must use the STP model – Segmentation-Targeting-Positioning. Start by segmenting based on the abovementioned factors, then narrow it down to which market segments are most valuable for your product or service. Once this is done, focus all your efforts on that segment to maximize impact and optimize ROI.

Now that you have identified your target segment, you must determine which of these segments is the most valuable. Assessing the buying power and propensity of the customer is critical as this will directly affect your ROI from targeting them.

Create Your Positioning

The next step is to create a compelling brand position, which helps you to stand out from the competition and is critical for success in the market. You must ensure that your message is memorable and distinctly different from your competitors.

To do this, you need to clearly state what makes your product or service unique and the benefits that come with it. Here are specific positioning strategies:

  • consumer-based positioning,
  • price-based positioning,
  • product-based positioning,
  • promotion-based positioning, etc.

Evaluate Your Marketing Mix

This final step could be a lifeline if you struggle to make your strategy work. Evaluating the marketing mix is essential, as it will give you an insight into how well your campaigns perform. This mix consists of four parts – Product, Place, Price, and Promotion.

  • Product: It reflects the benefit, features, and value of your offering.
  • Place: It is the distribution channel through which you can reach customers and deliver your services or products to them. It includes physical stores, online channels, mobile platforms, etc.
  • Price: It is the monetary value that customers pay for the product.
  • Promotion: It represents how you communicate the value of your product or service to customers.

Once you have evaluated this mix, tweak it as needed to improve results and reach more customers.

Final Thoughts

It might now be clear to you why STP marketing is so popular. It is the key to generating maximum sales and ROI. Additionally, it can be used to create effective strategies that enable companies to differentiate themselves from their competition and tap into potential customer segments.

Still, If you have any questions, feel free to ask questions in the comment section. We will be happy to answer you.

Thanks for reading 🙂

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