Describes the STP process. That is: Segmentation, targeting and positioning.

1. -By Savita Maharaj

2. • Segmentation - grouping consumers by some criteria
• Targeting - choosing which group(s) to sell to
• Positioning - consumer perception of a brand or
product relative to the perception of competing brands
or products

3. The STP process demonstrates the links between an overall
market and how a company chooses to compete in that
market. It is sometimes referred to as a process, with
segmentation being conducted first, then the selection of one
or more target markets and then finally the implementation of
positioning. The goal of the STP process is to guide the
organization to the development and implementation of an
appropriate marketing mix.
STP PROCESS

4. Segmentation is diving the market into smaller groups of
buyers with distinct needs, characteristics, or
behaviours that might require separate marketing
strategies or mixes.

5.  Geographic Segmentation - grouping consumers based on their region,
city, climate etc.
 Demographic - group consumers based on age, gender, race etc.
 Geodemographics - used for classifying and characterizing
neighborhoods or localities based on the principal that residents living
near each other are likely to have similar demographic, socio-economic
and lifestyle characteristics.
 Psychographic - divides a market into different groups based on social
class, lifestyle, or personality characteristics
 Behavioral – Divides buyers into segments based on consumer
knowledge, attitudes, uses or response to a product

6. After dividing the market into segments, the organization then
evaluates the different segments and decide how many or which
segment it can serve best.
Almost all organizations use Market Segmentation approach to target
marketing because people are different and seek different ways to
satisfy their needs. This approach divides broad markets, consisting of
customers possessing different characteristics, into smaller market
segments in which customers are grouped by characteristic shared by
others in the segment.

7. 1. Undifferentiated Marketing (Mass Marketing) – Under this strategy the
marketer attempts to appeal to one large market with a single marketing
strategy. While this approach offers advantages in terms of lowering
development and production costs, since only one product is marketed,
there are few markets in which all customers seek the same benefits.
While this approach was very popular in the early days of marketing
(e.g., Ford Model-T), few companies now view this as a feasible strategy.

8. 2. Differentiated Marketing – This is were the firm targets more than one
market segments by introducing several products, each aiming at a different
segment. (e.g. running shoes, basketball shoes)

9. 3.Concentrated Marketing (Niche Marketing) - This strategy combines
mass and segmentation marketing by using a single marketing strategy to
appeal to one or more very small markets. It is primarily used by smaller
marketers who have identified small sub-segments of a larger segment that
are not served well by larger firms that follow a segmentation marketing
approach. In these situations a smaller company can do quite well marketing
a single product to a narrowly defined target market.

10. 4. Customized or Micro-Marketing – This target marketing strategy
attempts to appeal to customers with specific wants. For micro-marketing
segmentation to be effective the marketer must, to some degree, allow
customers to “build-their-own” products. E.g. Dell

11. Positioning is concerned with the perception customers hold regarding a
product or company. In particular, it relates to marketing decisions an
organization undertakes to get customers to think about a product or
company in a certain way compared to its competitors. Consumer typically
form their understanding of the product over a period of time using
information from a variety of sources, some of which are shown in the
following diagram: