STP Marketing

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 Around 91% of the customers prioritize personalized products over custom ones. 

Personalization not only sets a company apart but also fosters better relationships with the consumers. 

Very often, a majority of companies are stuck at improving personalization.

STP Marketing – Segmentation, Targeting and Positioning, is a three-step model that allows the examination of the company products or services as well as the way you communicate their benefits to specific customer segments.

STP marketing represents a shift from product-focused marketing to customer-focused marketing. This allows businesses to have a better understanding of their target audience and prioritize resources accordingly.

1. Segmentation- refers to the division of marketing into a distinct group of customers (the divisions are referred to as segments), using various segmentation practices.

Source: www.yieldify.com

2. Targeting- refers to the determination of which segment /customer group to focus resources on. Your ideal segment is one that is actively growing, has high profitability, and has a low cost of acquisition.

Source: www.neilpatel.com

3. Positioning- refers to the creation of product positioning and marketing mix that is most likely to allure the target audience.

There are three positioning factors that can help you gain a competitive edge: symbolic positioning 
( boost their customer’s self-esteem and image), functional positioning (solve your customer’s problem and provide them with genuine benefits), experiential positioning ( focus on an emotional tether). 
The most successful product positioning is a combination of all three factors. 
The amalgamation of the three factors can be visualised by creating a perceptual map.

Source: www.blog.alexa.com

A successful example of this strategy is “The Cola Wars”.

The 1980s witnessed the most brutal war between Pepsi and Coca Cola. To gain a competitive edge and possess a few stakes of the market share, Pepsi applied the attitude and loyalty segmentation approach and divided the market into three consumer segments:

1. Consumers with a positive attitude to the Coke brand who were 100% loyal to Coke.

2. Consumers with a positive attitude to the Pepsi brand who were 100% loyal to Coke.

3. Consumers with a positive attitude to both brands, with loyalty to both, switched their purchases between both brands.

Focusing on customers loyal to Coke was considered a waste of time and money, as they were unlikely to change their purchasing habits.

The tables turned in 1985 with the launch of New Cola. A vast majority of the customers called to complain about the change. While Coca Cola was busy trying to deal with the fiasco, Pepsi took advantage of the turbulence and Pepsi began targeting loyal Coke drinkers. The rival brand also refocused its positioning- that Coca Cola altered their classic coke to resemble Pepsi’s products. 

The marketing campaigns were brutal with Pepsi constantly taunting the quality and taste of the New Cola, rendering Coca Cola helpless.

This strategy was immensely successful with a 14% spike in overall product sales, that year.


Source: www.vox.com

The Bottom Line

STP marketing is an extremely valuable practise leading to immense growth and creation of engaging, personalized marketing campaigns that convert visitors to customers at a high rate.


-S Shwetha Iyer

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