You Gotta Know and See That We Are Too Clever
How to employ Segmentation, Targeting, and Positioning (STP) to develop marketing strategies
Today, the STP marketing model (Division, Targeting, Positioning) is a familiar strategic approach in modernistic marketing. It is one of the near commonly applied marketing models in do, with marketing leaders crediting it for efficient, streamlined communications practice.
STP marketing focuses on commercial effectiveness, selecting the most valuable segments for a business so developing a marketing mix and production positioning strategy for each segment.
As Martech continues to develop, and so practise opportunities for segmentation, targeting, and positioning. Then whether yous're brand new to STP or a seasoned veteran, it can be useful to take stock and double-check you're utilizing every chance you get to reach, interact with, catechumen and engage customers.
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The STP model is useful when creating marketing communications plans since it helps marketers to prioritize propositions so develop and deliver personalized and relevant messages to engage with different audiences. The three-stride funnel consists of market sectionalisation, market place targeting, and production positioning.
Within your enquiry-based market segmentation phase, you are aiming to identify a basis for the segmentation of your target customers, and determine important characteristics to differentiate each market segment.
When creating your targeting and positioning strategy, you lot must evaluate the potential and commercial attractiveness of each segment, and so develop detailed production positioning for each selected segment, including a tailored marketing mix based on your cognition of that segment.
In our poll asking about the about popular marketing model STP marketing won 2d place, just browbeaten by the venerable SWOT / TOWs matrix. The popularity of this marketplace-focused model is a departure from previous marketing approaches that were based more around products rather than customers. In the 1950s, for example, the main marketing strategy was 'product differentiation'.
Moreover, sectionalisation, targeting, and positioning is an audience-focused rather than production-focused arroyo to marketing communications which helps evangelize more relevant messages to commercially appealing audiences.
Applying Sectionalisation, Targeting and Positioning to digital communications
STP marketing is relevant to digital marketing too at a more than tactical communications level. For example, applying marketing personas can help develop more relevant digital communications as shown past these alternative tactical e-mail customer segmentation approaches.
This visual from Dave Chaffey of Smart Insights in his volume Digital Marketing: Strategy. Implementation and exercise shows how Sectionalization, Targeting and Positioning apply to digital marketing strategy.
Information technology reminds us how digital channels offer new options for targeting audiences that weren't available previously, only we need to reserve sufficient budget for. For instance:
- Search intent as searchers type keywords when comparing products they are interested in buying
- Involvement-based targeting in Facebook, due east.one thousand. Prospecting for those interested in Gardening, Gym membership, or Golf
- Targeting through electronic mail personalization and on-site personalization based on profile, behavior (e.g. content consumed)
There are too new opportunities to make a make more than compelling through offering new types of value to consumers based on a digital value proposition or what Jay Baer has chosen Youtility. This can exist via content or interactive tools on websites or mobile apps.
How to use STP marketing?
Through sectionalization, you can identify niches with specific needs, mature markets to find new customers, deliver more focused and effective marketing messages.
The needs of each segment are the same, so marketing messages should exist designed for each segment to emphasise relevant benefits and features required rather than one size fits all for all customer types. This approach is more efficient, delivering the right mix to the same group of people, rather than a scattergun approach.
You lot tin segment your existing markets based on nearly any variable, as long as it's effective every bit the examples beneath show:
Well-known means to segment your audience include:
1. Demographics
Breakdown by any combination: historic period, gender, income, education, ethnicity, marital status, education, household (or business organization), size, length of residence, type of residence, or even profession/occupation.
An example is Firefox who sells 'coolest things', aimed at a younger male audience. Though, Moshi Monsters, all the same, is targeted to parents with fun, safe and educational space for younger audiences.
ii. Psychographics
This refers to 'personality and emotions' based on behavior, linked to purchase choices, including attitudes, lifestyle, hobbies, take a chance aversion, personality, and leadership traits. magazines read and Boob tube. While demographics explain 'who' your buyer is, psychographics inform you lot 'why' your customer buys.
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At that place are a few different ways you can assemble data to assistance form psychographic profiles for your typical customers.
- Interviews: Talk to a few people that are broadly representative of your target audience. In-depth interviews permit you get together useful qualitative data to really sympathize what makes your customers tick. The trouble is they tin can be expensive and difficult to conduct, and the pocket-size sample size means they may non e'er be representative of the people yous are trying to target.
- Surveys: Surveys let you reach more people than interviews, but it tin be harder to get as insightful answers.
- Customer data: You may take data on what your customers tend to purchase from yous, such as information coming from loyalty cards if an FMCG make or from online purchase history if you are an eastward-commerce business. You can employ this information to generate insights into what kind of products your customers are interested in and what is probable to brand them purchase. For case, does discounting vastly increment their propensity to buy? In which example they might exist quite spontaneous.
An instance is Virgin Holidays who use partition, positioning and targeting to promote their holidays to 6 different audiences.
three. Lifestyle
This refers to Hobbies, recreational pursuits, amusement, vacations, and other non-work time pursuits.
Companies such as on and off-line magazine will target those with specific hobbies i.e. FourFourTwo for football game fans.
Some hobbies are large and well established, and thus relatively easy to target, such every bit the football fan example. However, some businesses take found great success targeting very minor niches very effectively. A great example is the explosion in 'prepping' related businesses, which has gone from a piffling heard of fringe activity to a billion-dollar manufacture in contempo years. Apparently at present iii.7 one thousand thousand American's think of themselves equally preppers or survivalists. A great way to start researching and targeting these kind of niches is Reddit, where people create subReddits to share information about a given involvement or hobby.
iv. Belief and values
Refers to Religious, political, nationalistic, and cultural beliefs and values.
The Islamic Depository financial institution of Britain offers Sharia-compliant banking which meets specific religious requirements.
A strange just interesting example of religious demographics influencing marketing that you might not have guessed is that Mormons are really into 'multi-level marketing'. They're far more likely to be engaged in the practice than whatsoever other Us group.
Going the extra mile with demographic enquiry tin can lead to discovering new marketing opportunities and thinking exterior the box. For case, did y'all know the boilerplate historic period of a Cadillac driver is 47.1 years erstwhile? But you don't tend to see them in the car ads. An opportunity waiting to be seized!
five. Life stages
Life stages are the Chronological benchmarking of people's lives at different stages.
An example is Saga holidays which are simply bachelor for people anile l+. They merits a large enough segment to focus on this life stage.
6. Geography
Drill down byCountry, region, area, metropolitan or rural location, population density or even climate.
An case is Neiman Marcus, the upmarket department store chain in the USA now delivers to the Uk.
7. Behaviour
Refers to the nature of the purchase, brand loyalty, usage level, benefits sought, distribution channels used, reaction to marketing factors.
In a B2B environment, the benefits sought are often well-nigh 'how soon can it be delivered?' which includes the 'last-minute' segment - the planning in advance segment.
An example is Parcelmonkey.co.uk who offers same-twenty-four hours, next mean solar day and international package deliveries.
8. Benefit
Do good is the utilize and satisfaction gained by the consumer.
Smythson Stationery offer similar products to other stationery companies, but their clients desire the benefit of their signature packaging: tissue-lined Nile Blue boxes and tied with navy ribbon!
Marketplace targeting
The listing beneath refers to what'south needed to evaluate the potential and commercial attractiveness of each segment.
- Criteria size: The market place must exist large plenty to justify segmenting. If the market place is small, it may brand information technology smaller.
- Difference: Measurable differences must exist betwixt segments.
- Coin: Anticipated profits must exceed the costs of additional marketing plans and other changes.
- Accessible: Each segment must be accessible to your team and the segment must be able to receive your marketing messages
- Focus on different benefits:Different segments must need different benefits.
Product positioning
Positioning maps are the last element of the STP process. For this to work, you demand two variables to illustrate the market overview.
In the instance here, I've taken some cars available in the UK. This isn't a detailed product position map, more of an illustration. If there were no cars in i segment information technology could point a marketplace opportunity.
Expanding on the extremely basic example above, y'all can unpack the market past mapping your competitors onto a matrix based on primal factors that determine purchase.
This chart is not meant to be any kind of authentic representation of the motorcar market, just rather just illustrate how you could use a product positioning map to analyze your own business concern'southward electric current position in the market, and identify opportunities. For instance, as you can come across in the gap below, we've identified a possible opportunity in the market for low-priced family cars.
Nosotros're not saying this gap actually exists, I'm sure you could think of cars that fit this category, equally the automobile market is an extremely adult and competitive market. Nonetheless, it does show how you can use the tool to place gaps in your own marketplace.
An example of a company using STP marketing?
Any time you lot doubtable there are significant, measurable differences in your market, yous should consider STP. Especially if you lot have to create a range of different messages for unlike groups.
A good example of segmentation is BT Plc, the Great britain's largest telecoms company. BT has adopted STP marketing for its varied client groups; ranging from individual consumers to B2B services for its competitors:
What to watch for in segmentation, positioning, and targeting marketing strategy
- Make sure the market is large enough to affair and customers can exist hands contacted.
- Employ market enquiry to ensure your approach will add together value to the existing customer experience, higher up and beyond competitors.
- As Martech continues to become more sophisticated, to support digital marketers' wants and needs, consider the developments in relation to your product/service.
Original reference sources
Lancaster G. and Massingham, L. (1988)Essentials of Marketing. Maidenhead, Berkshire, England. McGraw-Hill.
Smith, W. R. (1956). Product differentiation and marketplace segmentation as alternative marketing strategies.Journal of Marketing. (Vol. 21, Issue 1, July). p3-viii.
Free essential marketing models
Our complimentary guide details fifteen classic planning tools to assistance y'all use data and analysis to develop your marketing strategy.
Access the Essential marketing models
Source: https://www.smartinsights.com/digital-marketing-strategy/customer-segmentation-targeting/segmentation-targeting-and-positioning/
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