Business education
STP marketing
Targeting in marketing | STP marketing model |
Hello and welcome edify educational society. In today's lesson where we're looking at the STP marketing model (Targeting in marketing).
Even a company like Coca-Cola that operates in over 200 countries. And sells over a billion products a day and offers different products to suit different types of people.
read: leadership
sales vs marketing,
Now, STP stands for Segmenting Targeting and Positioning. And it's a simple framework that can help improve your marketing. And what the model says is that to achieve easier sales you should divide your market into groups of customers called segments. Select the most attractive segment or most attractive segments and then position your product in the marketplace, to be the most appealing to that segment.
Let's take a closer look, so the first step of the STP process(Targeting in marketing) is to segment your market. And here you divide your market into groups based on some criteria. And there's a number of criteria you can use.
we have a demographic segmentation. And that's where you divide your market based on a combination may be, age, gender, income level, education level, marital status etc.
You can divide your market based on geography. So, sorting your market by country, region, state or province or even urban or city area.
You can segment your market in a psychographic way. So, segmenting people by lifestyle, hobbies, activities, opinions, political affiliation, entertainment choices or maybe personality, traits or attitudes.
Now while demographic information explains, who your potential customer is. Psychographic information tends to explain, why they choose to buy.
Another way to segmented people is behavioural. And this breaks down your market by how they use the product. So, including how the purchase was financed, brand loyalty, their usage levels, key benefits, sort or key features used etc.
Now when you divide your market into segments. And then focus your marketing on a specific segment driven by the information you've collected. You're much more likely to be successful than if you simply created a one-size-fits-all generic marketing campaign.
So, the second step is targeting. And this involves deciding which of the segment's you've identified are the most attractive. So, essentially, you're trying to determine the commercial attractiveness of each segment. And there's a number of factors you can consider to do this.
So, for example, the size of the segment. And it's potential to grow in size in the future. The profitability of the segment. What segments are prepared to pay the most for your product or service? Or what's going to be the lifetime value of a customer in this segment. And finally, we have ease of reach. How difficult is it for you to reach the market with your marketing? Can your distribution networks easily reach this segment? Is it going to be really expensive to try and acquire a customer?
So ultimately it isn't just the size of the segment. You should be looking at. But it's the overall profitability of each segment.
So, the final step is positioning. Here you map out the different variables considered in the previous two steps. And position your product differently to your competitors in the minds of your customers.
You want your product or service to take a unique position in the market. In the marketing world, this is called your value proposition.
Now there are three standard ways you can position your product to achieve a competitive advantage.
So first you have functional positioning. And this refers to solving a problem or providing a benefit to your customer. Second, you have a symbolic positioning. This refers to enhancing the self-image ego or belongingness needs of your customer.
So, think about luxury cars, they market themselves using symbolic positioning. So, if a luxury car will get you from A to B just like any other car. But unlike other cars, they fulfil their customers self-esteem and ego needs.
The third way of positioning is experiential positioning. And this refers to focusing on those elements of your product or brand that connect emotionally with your customers.
Now ideally you want your product or brands to combine all three positioning factors. To put it as a competitive advantage to your competitors. Now one way of drawing your position in the market. Showing what's important in the mind of your customer.
Now there are a number of advantages and disadvantages associated with the model. So firstly, in terms of advantages, it allows you to increase sales by defining a precise target market. And then positioning products directly at that market. It helps you avoid wasting money by advertising to the whole market. And it helps you identify gaps in the market.
Now there are also a few disadvantages associated with the model. So, costs can increase if you have to produce multiple versions of your product or service. You will need to create different marketing campaigns and collateral for each segment you target. And again, that can increase your costs. And finally, you may need to use different distribution channels to reach different customer segments.
So, in summary, the STP marketing model(Targeting in marketing) is a three-step process. Designed to help you identify your most profitable customers. And then tailor your marketing and products to the needs of those customers. The three steps of the model are segments so divide your market into segments. Target identify the most attractive segments of your organization. And finally, position or positioning, position your product or service, to appeal directly to the audience you want to target.
So that's it from this lesson. We really hope you enjoyed it(Targeting in marketing). Thanks for reading………..
read: 7ps of marketing services
what is the marketing mix?
Introduction (Targeting in marketing)
A mistake many companies make is to think that anyone can be their customer. Taking this approach can make it difficult to sell your product or service. Because none of your prospective customers will feel that your solution is tailored to them and their specific needs. In fact, there isn't really a product in existence that should target everybody as its customer.Even a company like Coca-Cola that operates in over 200 countries. And sells over a billion products a day and offers different products to suit different types of people.
read: leadership
sales vs marketing,
Describe (Targeting in marketing)
Now, STP stands for Segmenting Targeting and Positioning. And it's a simple framework that can help improve your marketing. And what the model says is that to achieve easier sales you should divide your market into groups of customers called segments. Select the most attractive segment or most attractive segments and then position your product in the marketplace, to be the most appealing to that segment.
Let's take a closer look, so the first step of the STP process(Targeting in marketing) is to segment your market. And here you divide your market into groups based on some criteria. And there's a number of criteria you can use.
So, first segmentation
we have a demographic segmentation. And that's where you divide your market based on a combination may be, age, gender, income level, education level, marital status etc.
You can divide your market based on geography. So, sorting your market by country, region, state or province or even urban or city area.
You can segment your market in a psychographic way. So, segmenting people by lifestyle, hobbies, activities, opinions, political affiliation, entertainment choices or maybe personality, traits or attitudes.
Now while demographic information explains, who your potential customer is. Psychographic information tends to explain, why they choose to buy.
Another way to segmented people is behavioural. And this breaks down your market by how they use the product. So, including how the purchase was financed, brand loyalty, their usage levels, key benefits, sort or key features used etc.
Now when you divide your market into segments. And then focus your marketing on a specific segment driven by the information you've collected. You're much more likely to be successful than if you simply created a one-size-fits-all generic marketing campaign.
the second step is targeting
So, the second step is targeting. And this involves deciding which of the segment's you've identified are the most attractive. So, essentially, you're trying to determine the commercial attractiveness of each segment. And there's a number of factors you can consider to do this.
So, for example, the size of the segment. And it's potential to grow in size in the future. The profitability of the segment. What segments are prepared to pay the most for your product or service? Or what's going to be the lifetime value of a customer in this segment. And finally, we have ease of reach. How difficult is it for you to reach the market with your marketing? Can your distribution networks easily reach this segment? Is it going to be really expensive to try and acquire a customer?
So ultimately it isn't just the size of the segment. You should be looking at. But it's the overall profitability of each segment.
the final step is positioning
So, the final step is positioning. Here you map out the different variables considered in the previous two steps. And position your product differently to your competitors in the minds of your customers.
You want your product or service to take a unique position in the market. In the marketing world, this is called your value proposition.
Now there are three standard ways you can position your product to achieve a competitive advantage.
So first you have functional positioning. And this refers to solving a problem or providing a benefit to your customer. Second, you have a symbolic positioning. This refers to enhancing the self-image ego or belongingness needs of your customer.
So, think about luxury cars, they market themselves using symbolic positioning. So, if a luxury car will get you from A to B just like any other car. But unlike other cars, they fulfil their customers self-esteem and ego needs.
The third way of positioning is experiential positioning. And this refers to focusing on those elements of your product or brand that connect emotionally with your customers.
Now ideally you want your product or brands to combine all three positioning factors. To put it as a competitive advantage to your competitors. Now one way of drawing your position in the market. Showing what's important in the mind of your customer.
Advantages and Disadvantages
Now there are a number of advantages and disadvantages associated with the model. So firstly, in terms of advantages, it allows you to increase sales by defining a precise target market. And then positioning products directly at that market. It helps you avoid wasting money by advertising to the whole market. And it helps you identify gaps in the market.
Now there are also a few disadvantages associated with the model. So, costs can increase if you have to produce multiple versions of your product or service. You will need to create different marketing campaigns and collateral for each segment you target. And again, that can increase your costs. And finally, you may need to use different distribution channels to reach different customer segments.
Summary
So, in summary, the STP marketing model(Targeting in marketing) is a three-step process. Designed to help you identify your most profitable customers. And then tailor your marketing and products to the needs of those customers. The three steps of the model are segments so divide your market into segments. Target identify the most attractive segments of your organization. And finally, position or positioning, position your product or service, to appeal directly to the audience you want to target.
So that's it from this lesson. We really hope you enjoyed it(Targeting in marketing). Thanks for reading………..
read: 7ps of marketing services
what is the marketing mix?
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