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What Is the STP Process in Marketing?
© iStockphoto Use the STP Model to focus your sales and marketing efforts where they'll have the biggest payoff. Sofia has just started a new job as a marketing manager for a fashion outlet. She conducts a careful analysis of sales data within the first few weeks, and quickly identifies a profitable opportunity with a particular group of high-value customers. So, she brainstorms several ideas with her team, and they come up with an exciting new product which has the potential to be a real success for the company. But how can Sofia check whether her idea will really work? How can her team members develop the perfect product for their target market? And how should they communicate its benefits? In this article, we'll look at the Segmentation, Targeting and Positioning (STP) Marketing Model, an approach that you can use to identify your most valuable market segments, and then sell to them successfully with carefully targeted products and marketing. What Is the STP Marketing Model?The STP Marketing Model can help you to analyze your product offering and the way you communicate its benefits and value to specific groups. STP stands for:
The model is useful because it helps you to identify your most valuable types of customer, and then develop products and marketing messages tailored to them. This allows you to engage with each target group more effectively, personalize your messaging, and – ultimately – increase your sales. STP Marketing: An Example Marriott International® owns a number of different hotel chains that target specific consumer groups. It splits its hotel portfolios into five key groups, each designed to target a different sub-set of consumer:
As you can imagine, Marriott International doesn't communicate the same marketing message to all of its customers. Each hotel is designed and positioned to appeal to the unique wants and needs of a specific group. Applying the STP ModelFollow the steps below to apply the STP Model in your organization. For each step, we've also provided a worked example using the fictitious travel firm, the Adventure Travel Company. Step 1: Segment Your MarketYour organization, product or brand can't be all things to all people. So, use market segmentation to divide your customers into groups of people with common characteristics and needs. This allows you to tailor your approach to meet each group's needs effectively, and gives you a huge advantage over competitors who use a "one size fits all" approach. There are many different ways to segment your target markets:
Example:The Adventure Travel Company is an online travel agency that organizes worldwide adventure vacations. It has split its customers into three segments, because it's too costly to create different packages for more groups than this:
Step 2: Target Your Best CustomersNext, you need to decide which segments to target by identifying the group that will offer the largest return and will be the most profitable. There are several factors to consider here:
Example:The Adventure Travel Company analyzes the profits, revenue and market size of each of its segments. These are its findings:
So, it decides to focus on Segment A, after confirming that the segment size is big enough (it's estimated to be worth $220,000,000/year.) Get the Free NewsletterLearn essential career skills every week, plus get a bonus Essential Strategy Checklist, free! Read our Privacy Policy Step 3: Position Your OfferingFinally, you need to identify how you should position your product to target the most valuable customer segments. Then, select the marketing mix that will be most effective for each of them. Consider why customers should purchase your product rather than those of your competitors. Do this by identifying your unique selling proposition, and draw a positioning map to understand how each segment perceives your product, brand or service. This will help you determine how best to position your offering. Also, look at the wants and needs of each segment. A good way to do this is by pinpointing the problem that your product solves for these people. Create a value proposition that clearly explains how your offering will meet this requirement better than any of your competitors' products, and then develop a marketing campaign that presents this value proposition in a way that your audience will appreciate. Example:The Adventure Travel Company markets itself as the "best eco-vacation service for young married couples" (Segment A). It hosts a competition on Instagram® and Pinterest® to reach its desired market, because these are the channels that these target consumers tend to favor. It asks its followers on these channels to send in interesting pictures of past eco-vacations, and the best one wins an all-inclusive trip. The campaign goes viral and thousands of people send in their photos, which helps build the Adventure Travel Company mailing list. The company then creates a monthly e-newsletter full of eco-vacation destination profiles. Key PointsThe Segmentation, Targeting and Positioning (STP) Model helps you position a product or service to target different groups of customers more efficiently. STP stands for:
This three-step approach helps you quickly zoom in on the most profitable parts of your business, so that you can fully exploit the opportunities that they offer. To use the model, start by segmenting your market into groups. Next, choose which of these you want to target. Last, identify how you want to position your product, based on the personality and behavior of your target market. * Originator unknown. Please let us know if you know who the originator is. Which of the following is the first stage in the positioning process?The first step in the positioning process requires the marketer to verify that he has a complete and firm understanding of his target market. In the next step, the marketers need to identify their competitive advantage.
Which of the following refers to a technique that divides consumers into groups on the basis of how they act toward feel about or use a good or service?Behavioral segmentation refers to a process in marketing which divides customers into segments depending on their behavior patterns when interacting with a particular business or website.
What is the fifth step in the positioning process quizlet?What is the FIFTH step in the positioning process? Develop a distinctive, differentiating, value-based positioning concept.
What is the name for a strategy in which marketers evaluate the attractiveness of each potential segment?Segmentation: Dividing a market into distinct groups with distinct needs, characteristics, or behaviours that might require separate marketing strategies or mixes. Targeting: The process of evaluating each market segment's attractiveness and selecting one or more segments to enter.
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