Analysis of Segmentation, Targeting, and Positioning (STP) Report

This report provides a comprehensive analysis of the Segmentation, Targeting, and Positioning (STP) strategy in modern marketing. It begins with an executive summary highlighting the importance of STP in developing effective marketing mixes. The introduction emphasizes STP's role in identifying target customers and creating competitive advantages. A literature review explores segmentation based on various factors, the importance of targeting the right customer groups, and the development of effective positioning strategies to differentiate products and services. The analysis includes case studies of BT Group, Marriott International Inc., and Walmart Inc., demonstrating how these companies have successfully implemented STP. The report also offers recommendations to support STP strategies, enhance marketing efficiency, and achieve organizational goals, emphasizing the importance of customer satisfaction and brand loyalty in driving long-term success. The report concludes by reinforcing the value of STP in creating value for customers, improving marketing efficiency, and enhancing overall organizational performance.

Market Analysis

Table of Contents
Executive Summary...............................................................................................................................2
Introduction...........................................................................................................................................3
Literature Review..................................................................................................................................3
STP Analysis.........................................................................................................................................7
Recommendations.................................................................................................................................9
Conclusion...........................................................................................................................................11
References...........................................................................................................................................12

Executive Summary
In this assignment, the analysis and evaluation of segmentation, targeting and positioning
strategic approach of modern marketing is done. This strategy is about segmentation of the
market, targeting the best market and aligning the product or brand in the same target market.
STP forms an integral part of the marketing strategies. With STP, the organisation is able to
identify their customers and take a decision for targeting these customers and finally appeal
these customers being targeted. This essay will also elaborate and illustrate the main
objective of this strategy, which is to develop and implement the best possible marketing mix.
The organisation needs to segment and segregate them according to the customer needs.
Positioning helps in tackling the competitors and their products. The positioning strategy will
help in identifying the target customers and deliver the products that will keep them hooked
to their products. The company would be able to focus on its target customer rather than
trying to cover up the whole market. This essay also analyses three companies who were able
to successfully implement segregation, targeting and positioning to procure the best
marketing mix. Further, recommendations have been provided to support the strategies and
how to effectively and efficiently work with the same so as to achieve the organisational
goals.

Introduction
The modern marketing has various components and segmentation, targeting and positioning
process (STP) is the most eminent out of all the various strategies. The STP strategies help in
finalising the best possible marketing mix for an organisation. It helps in identifying brands
and product offerings to compete in the marketplace. The whole process is about segmenting
the target market in groups with the same product needs rather than going for the entire
market and then targeting the most pertinent group or groups of customers fitting the criteria.
Lastly, development of positioning strategy is done and marketing mix is procured and
implemented.
Literature Review
The focus is on three areas namely segmentation, targeting and positioning. The ultimate goal
is creating value for the customers and development and maintenance of a customer
relationship that will help in capturing the market share. This process helps in aligning the
products with the right customers. Segmentation helps in dividing the large market into
groups based on different criteria and characteristics. The groups are formed on the basis of
their response to the products and how they will respond to a marketing action taken by the
company. The segmentation can be done on the basis of a lot of factors such as age, gender,
family status, income, psychograph and geographical location of the customer’s residence or
work. The reason why segmentation is important is that there might be one product and
multiple markets or multiple products for multiple markets. Segmentation supports the
decision making for target market selection. According to Tanner and Raymond, 2015,
Evaluation helps in satisfying some of the necessary requirements of the organisation like if
the segmented group is big enough and profitable enough or can the marketing strategy serve
the needs of this segment.

Post segmentation, the focus shifts towards targeting the group which needs to be served
according to the organisational goals. The customer needs is the focus of the organisation so
as to settle their brand and the products. The loyalty of the customer towards their brand
would decide the long term success of the company. According to Gengler and Mulvey
(2017), selecting target market depends on the size of the market, expected growth, cost
required for achieving the segmentation objectives and position of competitiveness in the
market.
According to Dutta and Bhattacharya (2015), positioning is the final step and it involves
development of a marketing strategy to analyse how a chosen market segment observe a
product in comparison to the market competition. The strategy helps in analysis of the
positions that the competitors are holding in the market. The company needs to launch and
offer better products in the market so as to get the competitive edge and always stay a step
ahead of its competitors.
The company needs to make sure they eliminate the risk of its competitors and cover their
market segment more efficiently. The brand value created with the help of the marketing mix
needs to be unique and should define the characteristics of the product and project a
distinctive image. The benefits of the product should be the highlight which would eventually
draw the potential consumers towards the product. As per Kotabe and Helsen (2014), the
distinction factor would make a difference in forming a long lasting image from the
customers’ point of view and it would lead the company to edge past their competitors.
STP helps in adding value and improving marketing efficiency of the company and enhances
the overall performance of the organisation. It increases the marketing campaign
performances and increases the profitability of the company. The strategy used in
segmentation is adaptive. The company goes for a perfectly suited segment. The whole

process is the marketing’s essence. The segmentation can be done on the basis of
demographic, geographic or psychographic leads. The company then only needs to focus on
the relevant segments and they can easily ignore the segments not matching their criteria. The
resources can now be fully utilised for the relevant section or group finalised by them. This
process needs to be accurately framed (Westjohn et al. 2016).
However, the company might decide to go for more than one section and let the market share
spread on its own. This helps in deciding the marketing mix that is precisely required for such
group or segments. The confusion diminishes and accuracy increases because of the fact that
lesser area needs to be covered rather going for the whole market. Going for the whole
market is very tough. The company will have to eliminate more competitors and have more
resources to fulfil the customer needs. The focus should always be on satisfying customer
needs and this way the focus area is precise and helps the company to work for the
satisfaction of their target customers. The segmentation team will work on the groups and
figure out the pros and cons of going for a segment. They can divide the segments further into
smaller groups based on the timing, preferences, gender, season and interests. The company
needs to make sure they cover all the basics for reaching out their target customers and offer
products that are better than the ones already ruling the market. The marketing channel,
media platforms, size or quantity of the product are other factors that needs to be taken into
consideration. The product positioning strategies have to be accurate for each segments being
finalised. This might not be possible to use the same strategy for all the segments. According
to Phillips (2016), Accuracy is the key and managers and their teams need to evaluate all
such factors to make sure they are not missing out on anything important that might decide
the fate of the brand, its image or the product to be very precise.
The media and marketing campaign have to be direct, appealing and attractive stating the
benefits of their product. STP would guide them through it as it helps in structuring the

campaigns and forming policies as well as the required strategies. STP reduces the work load
and makes sure that the resources are being used in the right area. Targeting the potential
customers would be the key and they have make sure they cover the customers’ feedback and
work on it rather than just making this a one way communication through marketing. The
brand image developed with the help of STP would be the deciding factor related to the
profitability and future growth of the product. It should be grand and appealing drawing the
customers towards the product and develop as well as increase the loyalty of their customers.
This STP process helps in attracting the right customers, utilise the company’s limited
resources through the market based on buyer’s demand, reducing risk of areas to invest,
increasing market efficiency, gaining and retaining customers by satisfying their needs and
lastly by reduction of marketing cost where it was not required. This how STP process helps
the company in serving the specific needs of their customers. The company can then
capitalise on their customer base so gained by satisfying their needs with STP process and
increase their profitability and as well as the customer base by either offering more variety or
going for a different set of segments (West, Ford and Ibrahim 2015).
STP Analysis
There are so many companies who were able to successfully formulate strategies and
segments based on the STP approach and implement the same positively ultimately getting
the desired results. Looking into the STP approach implemented by BT Group
(Telecommunication), Marriott International Inc. and Walmart Inc., it is evident that these
companies have successfully achieved their goals with the help of this approach.
BT Group plc belonging to the telecommunication sector having their USP being the world’s
oldest telecom company operates in around 180 countries which also provides IT services,
have successfully implemented the STP approach. Their segments include national and

international telecommunication services, network based IT services and high end broadband
and internet services and related products. It is argued that BT is evolving as a brand where it
shall focus on customer service. They targeted the major corporate, businesses, consumer and
wholesale segments that use communication services and communication solutions. Their
positioning was accurately placed for the corporate companies and government customers all
around the globe. Their retail division supplies broadband services, telephony services and
television subscription services in the UK having customers more than 18 million. Their
competitors are Vodafone, Orange and Telefonica but BT group manages to eliminate the
risk as much as possible (Ascarza et al. 2017).
Marriott International Inc. belongs to the hospitality industry and offers lavish hotels and
resorts to its customers. The strength has been their global market leadership. The segments
they have been working upon include leisure travellers and business travellers. The premium
travellers are also included in their segmentation. It is argued that they target the people
belonging to the upper classes that are ready for spending on lavish hotels and travelling.
Marriott runs several campaigns that persuades different countries to consider opening a hotel
branch. People looking for their corporate meetings or parties also prefer Marriott because of
the class, elegance and warm hospitality. Couples on their honeymoon prefer this chain of
hotels because of the comfort and hospitality they offer. They focus and work on the
satisfaction of their customer and their reviews are the best way to judge their quality of
services being provided. They have also been preferred by the families for holidays and
leisure. They position their services so accurately that the loyalty of their customers never
degrades. The locations of these hotels are also one of the biggest positive factors that they
offer to their customers. Located in the prime areas and offering luxury stays have been their
selling point and it keeps on drawing the customers. Their competitors are other hotel chains
such as Hilton Hotels and Resorts and Starwood Hotels and resorts. These hotels are trying to

compete but Marriott has an edge over them which floats them one of them best in the
hospitality industry (Palmatier and Sridhar 2017).
Walmart Inc. has segmented their base on the basis of domestic and international location.
They have stores in rural as well as urban areas as well. Their segmentation on the basis of
age and gender has been wide because they target people of all ages and gender. On the basis
of income, they focus on low level income people or middle class people. Based on the
psychographic factors, the focus is on lower class, working class and middle class sections.
The target more of the younger generation for long term purposes and maintain their loyalty
towards the brand. They attract the millennial segment offering products at cheaper rates and
that is why people prefer Walmart over their competitors such as Target and Costco. They
shifted from traditional print media advertisements to mobile advertisements to reach out to
the youth of the country. Schultz (2018) mentioned that the marketing mix used by them has
been so accurate and they selected the media platform which is widely used by the people
these days.
Evidently, it is not surprising that STP approach helps in finely segmenting the market base,
selecting the best ones to target to work upon from the pool of segments and positioning their
products to satisfy the customer needs. Walmart focuses on targeting the people of all age
groups and gender. Marriott segments the market on the basis of their quality of service at
such prices that the customers are ready to spend. BT Group focuses on the mobile services
and broadband services to the people and corporate sector and manages the positioning to
corporate sectors and government employees. These companies have accurately used this
approach and targeting their customers is the most vital part of this approach. Companies that
can afford the luxury of serving to a larger segment of people like Walmart go for the big
chunks of the market share where as Marriot focuses on the upper class people precisely. The
marketing mix so developed with the help of STP approach has led to the success of their

campaigns. STP approach just comes after the SWOT analysis in the marketing strategies and
it is as vital as it gets. Satisfaction of the customer needs is the prime focus of these
companies and it is accurately achieved with the help of this approach (Kotler 2015).
Recommendations
Launching a product needs utmost care because that decides the future of the brand, product
and the company as well. The initial stage are the most delicate ones as even a little mistake
can be fatal and cause long term damage to the image of the product that the company is
trying to develop. It takes a lot of planning and analysis which in turn gives the best results
and help the company achieve its objectives. The optimum utilisation of a company’s
marketing strategies can be done with the support segmentation, targeting and positioning
model. The strategies so developed will help the organisation in getting better customer base
and satisfy their long term goals for sure. For achieving the same, a company needs to work
on the segmentation, targeting and positioning model. They need to make sure that the
segmentation is done according to their strengths (Dibb 2017). Segmentation can help in
identifying niches with particular needs for delivering effective marketing messages.
According to the industries analysed in the previous section, it is recommended that customer
service can be improved where the experiences match the customer expectations. It is
recommended that the companies may adopt multi-brand strategy where they can target more
number of consumers. The segments can be made on the basis of different factors like age,
gender, psychographs, geographical location and other similar patterns. For example, if the
company wants to target a specific age group or gender, they need to sub categorise them on
the basis of other factors such as the area, range, gender, occupation, family size and income
they want to go for. The product decides the age group range and gender the company needs
to target. The company needs to figure out which group or groups should be their target

according to the products they are going to offer. The company needs to choose the
characteristics as per the demographic market targeted which is in relation to the interests,
needs and abilities of the customers. Segmentation process is the first and the most critical
step because that would decide the direction and area that they are going to target. They need
to observe and focus on specific group of set of groups rather than going for the whole
market. The growth factor also needs to be considered while segmenting the market. The
segmentation is done on the basis of choices that these customers make and after
understanding the characteristics of these groups, the company needs to pick one or several
that will serve them the purpose and satisfy their customers’ needs. The marketing resources
will be directed towards these target groups only.
The company needs to analyse their resources and check whether they have enough resources
that can satisfy the needs of this segment. The competitors’ strength needs to be critically
analysed and the product being offered needs to have at least one or more advantages above
the competitors’ products which would give them the edge. The company needs to select a
product or market for research, list the needs of the customers, select a basis of segments,
analyse the homogeneous segments, figure out the determining factors and segments and then
select the target market. Targeting helps in securing the primary customer base. The company
should evaluate and analyse each segment and pick the best ones to enter (Horner and
Swarbrooke 2016).
The strategic options available to select the target market are undifferentiated, differentiated
and concentrated strategy. Target marketing helps in making the pricing, distribution and
promotion of the products more cost effective. The company should focus on targeting the
area which helps in generating customer value and profitability as well. Marriott may
consider undertaking high-profile additions for meeting its requirement portfolio. New
segments of luxury and lifestyle may be explored by the company.

Lastly, the focus shifts to its positioning part where the company works in aligning the brand
or products in the market being targeted. The company’s objective should be offering
something better than what is already available in the market. That is how they can introduce
their brand or product informing the customers about the difference between their product
and other ones available in the market. This helps in maintaining the marketing cap. The
plans and strategies formulated by the company should be evaluated taking customers’ need
in mind and increase the company’s brand awareness. The media platform used by the
company should be the one which is most frequently used by the target customers.
Implementation should be accurate based on the research of marketing experts of the
company. Ultimately, they need to develop the marketing mix and implement it. The
performance might not be as good as expected and hence the company needs to review its
effectiveness and efficiency and work towards making it better next time (Khare 2015). For
implementation of repositioning, there is a need to understand the brand needs. One approach
to identifying consumer product perceptions is multidimensional scaling. The analysis is
implemented by moving the brand in a desirable direction as sought by the consumers.
Conclusion
Conclusively, the support provided by segmentation, targeting and positioning on marketing
process is evident and vastly beneficial. The organisation needs to work on this strategy and
form segments to choose their target market and position their products according to the
customer needs. The process helps in competing with the rival companies and their products
and eventually covers market segments being targeted. The benefits derived are helpful as it
helps in deciding the proper marketing mix required by the company namely product, place,
promotion and price. STP is the useful if the same has been developed and implemented
effectively and efficiently.

References
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