STP in marketing stands for Segmentation, Targeting, and Positioning. It is a three-step model that examines products or services as well as the way businesses communicate their benefits to specific customer segments. The STP framework implements market segmentation in three steps:
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Segmenting: This means identifying and classifying consumers into categories called segments.
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Targeting: This step identifies the most attractive segments, usually the ones most profitable for the business.
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Positioning: This step proposes distinctive competitive advantages for each segment. Positioning is the final stage in the STP' process and focuses on how the customer ultimately views a product or service in comparison to competitors. It is important in gaining a competitive advantage in the market, as customer perceptions have a huge impact on a brand's positioning.
The STP marketing model is effective because it focuses on breaking a customer base into smaller groups, allowing businesses to develop very specific marketing strategies to reach and engage each target audience. By tailoring marketing communications to specific customer segments, businesses can create personalized messaging that should hopefully appeal to the niche they’ve chosen to focus on, resulting in higher engagement with the target audience and more sales converted in the marketing campaign.
