Strategic Marketing: Segmentation, Targeting and Positioning (STP)

Strategic Marketing

Table of Contents
Introduction............................................................................................................................. 2
Concept of Segmentation, Targeting and Positioning (STP).....................................................3
Segmentation....................................................................................................................... 4
Targeting.............................................................................................................................. 5
Positioning............................................................................................................................6
Industry Examples.................................................................................................................... 7
Volkswagen.......................................................................................................................... 7
Nivea.................................................................................................................................... 9
Apple Inc.............................................................................................................................10
Recommendations................................................................................................................. 11
Conclusion.............................................................................................................................. 13
References..............................................................................................................................14
List of Figures
Figure 1: STP Model..................................................................................................................3
Figure 2: STP Process................................................................................................................4
Figure 3: Segmentation Strategies........................................................................................... 5
Figure 4: A Positioning Map of Automakers.............................................................................7
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Introduction
In today’s competitive business world, organisations rely on effective marketing techniques
to attract customers and increase their sales. The corporations use marketing tactics to
identify potential customer bases to target and promote their products to them.
Segmentation, targeting and positioning (STP) are referred as three key elements of a
company’s strategic marketing efforts. In order to stay relevant in the market and sustain
their future growth, organisations are required to create revolutionary products and
services; however, it is not enough to capture the market. Organisations also required
identifying who, among the population, would be interested in purchasing their products. In
order to find this information, corporations use STP strategy which provides relevant
information to the company to target its products to a specific customer base (Wood, 2013).
This essay will focus on evaluating various literature to explore and understand the concept
of Segmentation, Targeting and Positioning (STP). This essay will also analyse various
appropriate industry examples which prove how companies could apply the concept of STP
to expand their customer based and sustain their future growth. Furthermore,
recommendations will be given in essay for corporations to implement the principles of STP
to sustain their future growth in the market.
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Concept of Segmentation, Targeting and Positioning (STP)
Segmentation, Targeting and Positioning (STP) is referred to a broad marketing framework
which is used by marketers while performing the process of market segmentation by
summarising and simplifying the same (Khan, 2013). It is used by organisations to
understand economic, psychological and socio-cultural attributes of customers along with
their perceptions, cognition, motivations, personalities and attitudes.
Figure 1: STP Model
(Source: Hanlon, 2018)
Following are a number of benefits of STP model.
 Collection of relevant information regarding effective positioning of the product
 Avoiding competition with other organisations which are focused towards capturing
the same target market
 Easy identification of early adopters of products
 Exposure to less profitable brands
 Opportunities to develop new products and successful expansion of product line
 Easy planning of reinvestment and sales efforts which are focused towards most
profitable targets (Khan, 2013)
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