Strategic Marketing: In-Depth Analysis of the STP Process

This report provides a comprehensive overview of the STP process, a fundamental model in strategic marketing. It dissects the core elements of market segmentation, targeting, and positioning, highlighting their significance in developing effective marketing strategies. The report details various market segmentation criteria, including demographic, behavioral, psychographic, and geographic segmentation, along with their respective advantages and limitations. It also explores the merits of market segmentation, such as personalized marketing efforts and identification of untapped product opportunities. The report then moves on to targeting, emphasizing the importance of focusing on specific market segments and the choices of marketing coverage. Finally, it delves into positioning, explaining how companies can create a unique image in the target market's mind. The report concludes with a recommendation for marketing managers to optimize their marketing planning and strategy development, ensuring alignment with consumer needs and preferences.

MARKETING

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
THE STP PROCESS.......................................................................................................................1
SEGMENTATION..........................................................................................................................1
3.1 Characteristics of market segmentation................................................................................2
3.2 Market Segmentation Criteria...............................................................................................3
3.3 Merits of Market segmentation.............................................................................................4
TARGETING...................................................................................................................................4
POSITIONING................................................................................................................................5
RECOMMENDATION...................................................................................................................6
CONCLUSION................................................................................................................................7

INTRODUCTION
Marketing is referred as study and management of exchange relationships as it is business
process to satisfy and create relationship along with satisfying customers. The present report will
discuss about STP process as essence of strategic marketing as it is essential model for
application and study of marketing. It will articulate about each element and detailed information
about segmentation as goal of STP process is for directing organization to implementation and
development of proper marketing mix. Present report will articulate the process of market
segmentation, targeting and positioning along with their feature. Report will also cover the
advantage of these marketing efforts. Lastly, recommendation will be given to marketing
manager for efficient marketing planning.
THE STP PROCESS
This process provides demonstration about association among overall market and method
of organization through which it competes in market. The marketing is combination of
segmentation, targeting and positioning whereas this model is useful for designing plans of
marketing communication as it helps marketers for prioritizing proposition along with delivering
and developing relevant and personalized messages for involving with various audiences. In
simple words, it is fundamental concept for purpose of understanding strategies and marketing of
business. This lays special emphasis on commercial effectiveness, choosing valuable segments
with context of business and developing strategy of product positioning and marketing mix for
every segment.
SEGMENTATION
Market segmentation is considered as process to group people on collaborative aspect
with smaller segments along with identical needs which reflects similar buying pattern.
Generally, it is performed for differentiating product or for targetting particular group of people
to earn margin. Marketing manager divides people into small cluster so that they can make
personalised marketing efforts for different group of buyer. Segmentation lower the chances of
failure of marketing campaign because it tries to cover all the need and preference of particular
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group. For instance people belongs to middle income level can be put in one segmentation, on
the other side buyer who have similar like and dislikes would be categorises in one group. It not
only help in design the marketing and promotions but marketing manager also get to know more
about people, like what would be their response in launch new feature in product, or change in
price of the product. Marketing leader take action according to the nature of these people as
buyer who possessed high cultural value would not accept promotion containing anti sociality
massage and element (Schlegelmilch, 2016). Apart from promotion, distribution decision,
product deign decision, effective utilisation of organisational resources and timing of different
promotional activities are some other indirect advantage of segmentation process.
3.1 Characteristics of market segmentation
With context of market segmentation, it is categorised in four recognised variables which
are detailed as below:
Demographic segmentation: This is replicated as broadest type which is highly used by
various organization to acquire correct amount of population in product consumption. It has
presence of its own variables like gender, age, family, size, religion, nationality and occupation.
Demographic segmentation analysis is easy as manager can use census data to know how, where
and to whom can be target. Customer loyal will be increase with great intensity because buyer
receive what they want. For instance- manager decided to render product in different size to aim
different size of family member.
Advertisement campaigns is one of the best examples of demographic segmentation that
Turkish Airlines ıs takıng ınto consideration, about the customer’s income and occupations also.
Turkısh Aırlınes have enquıred about the potentials of this segment; they compromise their
customer satısfactıons as well as pleasures. However, this advertisement campaign appeals upon
potential business class travelers but it does not draw the attention on this concept in
highest level. This type of advertisement help the company for taking ınto
considerations for other segments to create brand appreciation. In order to
dımınısh the disappointment of this campaign, Turkısh Aırlınes desire to use
different media types in combination.
Behavioural segmentation: It splits population on basis of behaviour, decision making
and usage pattern. Even with reference to individual behaviour, the product is promoted. Buyer
with same buying behaviour pattern like quantity and frequency of purchase a product, product
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requirement and need, loyalty etc. behavioural segmentation though render more benefit to
marketing people to know the behaviour of people but it has some limitation too. For instance
buyer behaviour can be consider as most unpredictable behaviour that can be change with their
requirement, location and occasion. This segmentation can not be done in quantitative data, it
wholly render qualitative data which is hard to present in reports
Psychographic segmentation: This segmentation uses people's lifestyle, interests,
activities along with opinion for defining market segment. This segmentation is quite similar for
behavioural segmentation whereas psychological aspects might be related to lifestyle of
consumer, activities, opinions and social standing. Psychographic can be known as extension of
behavioural and demographic segmentation because it adds more behavioural element along with
those factors. Different dimension of Psycho-graphic segmentation are- activities, like- dislikes,
personality characteristics, Social Status, value and attitude. This segmentation help manager to
directly touch the soft concern of buyer as promotional activities like advertisements are design to
influence them emotionally (Zia and Kumar, 2016). Manager also enable to predict behaviour of
other buyer who shows same personality traits.
Geographic segmentation: It divides people on basis of geography and potential
customers have different needs on located geography. It is the easiest segmentation but it was
actually used in last decade with innovative industries. It helps manager in take distribution
decision, promotion and place decision for product. For instance- manager can make a different
cluster of consumer who belongs to remote area where poor infrastructure does not allow
marketing team to make promotion on TV and social media. In such case marketing manager can
go to traditional promotion via radio, brochure and newspaper advertsimenets. Geographic also
help in product design as every geographic feature share different ciliate condition, which
demand some difference in product too. Like product offered in hot area required anti thermal
packaging. Manager also uses local distribution for different geographical area as they know
better about their area.
3.2 Market Segmentation Criteria
Its emphasis on segmented markets, organization is permitted with application of
properties in efficient and effective aspect and accumulating probability of its attainment in
marketplace. The requirements on basis of effective market segment should be favourable,
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substantial, actionable, differentiable and accessible. The five requirements of effective
segmentation are described in below table:
Table 1: Effectıve segmentations, Source: (Kotler 2010 )
3.3 Merits of Market segmentation
Segmentation helps a marketing manager in many ways like- marketing people can
directly target the particular segment with personalised marketing effort as per the need and
preference of a particular segment. Manager also get the untapped product opportunities because
when manager make different segments they also know about hidden product expectation and
requirement for one set of persons. It also gives maximum consumer satisfaction as target
people receive marketing mix elements as their choice (Grunert, 2018.). Manager also decided
the timing of marketing efforts according to differer segmentation like young people receives
frequent On the contrary, there is determination of limitation with concept of STP as it has been
argued that practices of market segmentation could limit companies by accounting powerful
trends of innovation with reference to market shifts and it leads to disrupt innovation. The merits
of market segmentation are described in below stated table:
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Table 3 : The Advantages of Segmentations . Source: Dibb et. al. 2006
TARGETING
Targeting is effort to concentrate more on one segment. Here, manager tries to focus
more on different segmentation rather than target entire market altogether. It helps organisation
to directly communicate with target audience with losing the focus on undefined market.
Customer are more attracted to promotion which have massage for their benefit. For instance a
confectionery company put their advertising on cartoon channel, educational website and games
website, children quickly attract towards these, because they are made only for them. Targeting
also help in make brand reputation because people easily recognise a particular brand which best
suits them. It is replicated as process followed through segmentation and as process of
identifying markets along with planning advertising media with application to make the segment
appealing. It is an exchanging environment whereas traditional targeting practises of advertising
via print and other media sources as they have formed method for presence of social media and
leading to more focus on web connected. In the similar aspect, there are three choices of
marketing coverage while targeting in market along with differentiated, niche and
undifferentiated marketing. In order for selecting targeting choice for following, it highly
depends on service and product being offered (Ohmae, 2016). Furthermore, undifferentiated
marketing is replicated as best option for laying emphasis of entire market along with promoting
products which has broad target segment. The niche and differentiated marketing are highly
focused on more selective and smaller segments.
Simultaneously, press provides support to reach non-targeting and targeting spectators
but with uniformity which inhibits advertisement of long term perspective. Magazine is
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appropriate type of media which raises prestige of company on mind of target customers. For
instance, Turkish Airlines has opted for Hollywood star to produce campaign of global
advertisement as it name behave like local company in every country (Kotler,1999). This
advertisement has spread awareness to potential foreign customers such as British customers
related to company services and name.
POSITIONING
Positioning in organization is replicated by performance of designing contribution to
company along with image for conquering unique place in mind of target market. In this aspect,
this works for fixed business such as shampoo and washing powder. There are various standard
approaches where positioning does not work on mandatory aspect. The leading company also
does not guarantee about its tomorrow position because innovative technologies could turn as
seemingly solid position into fragile almost overnight (Ohmae, 2016). No amount of advertising
could prevent with context of that happening. Positioning is agreed that current market place on
over communicated society where is presence of multiple information communicated through
their suggestions. In order to attain success and communicating messages to market place,
positioning is highly required.
In the present scenario of over communicated society, contradiction is replicated as very
significant aspect in communication. With context of communication every thing is possible and
vice versa as positioning is all about communication. It is an organized system for extracting
windows as in simple words, it is based on concept that communication could undertake place at
right time under appropriate circumstances. While bearing this in mind, it is highly significant
for simplified position statement in order to attain mind of prospects. It is replicated as model to
transform environment of advertising and people face trouble for understanding the concept.
Positioning make whole marketing mix, more consumer oriented. Positioning need alternation in
all the marketing mix element as per the target buyer. For instance- when company launch some
organic food product to target healthy lifestyle people in such case company design its marketing
mix like- they promote healthy lifestyle over fast food in their advertisement, store decoration
also reflect the healthy habits' poster and quotation (Siswanto, 2017). Process dimension of
marketing mix is ensured with organic ingredients, use of fresh vegetable toppings and no use of
processed with minimum use of artificial colouring and preservatives. Competitive parity cab be
achieve with help of branding. Competitive parity is distinguished space achieve by one brand
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among their competitor (Kotler, 2004). All the player in belong to same industry render almost
same kind of product and service to their potential and existing buyers. A company can only earn
a special place in consumer mind by highlight their strength and product differentiation. Like
apple i- phone become synonym for most safe, expensive and advance phones.
”Standard approaches to positioning do not necessarily work. A company that is number
one today has no guarantee that it will be number one tomorrow. New technologies can turn a
seemingly solid position into a fragile one almost overnight. No amount of advertising can
prevent that from happening. Even with the best of slogans, a company can lose its position in
the market.” Mc Kenna (1985, p.15)
Positioning ıs agreed that the market place ıs currently an over communicated society where
there are too many information is beıng communicated by theır suggestions (Ries & Trout, 2006,
p.6). In order, to be successful in communicating messages on the market place in the over
communicated society, Positioning ıs required.
In thıs over communicated society, the contradiction is that the most important thıng ıs
communication. Everything ıs possıble with communication and wıthout communıcatıon,
nothing is possible, regardless how brilliant and motivated somebody can be. (Ries & Trout,
2006, p.19). Positioning is all about communications. Positioning is to tell the right things to
the right person at the right time. Positioning is an organized system for finding windows in the
mind, NASA call this a window in space. In other words, ıt is based on the concept that
communication can only take place at the right time under the right circumstances. Bearıng this
in mind, it is important to keep the position statement simplified, ın order to reach the mind of
the prospects (Ries & Trout, 2006, p.7)
Positioning is a model of transformıng the environment of advertising. People are havıng
trouble to understand how powerful the concept ıs, despıte it is sımple one. (Ries & Trout, 2006,
p.2). As per Trout, on the market place, the history behınd the advertisement, which now is over
communicated, have existed in three different eras (Ries & Trout, 2006, p.22-24):
The below Table descrıbe the three dıfferent Eras :
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Table 2: Three Eras, Source: Ries & Trout
Nearly, all people recognize the names of the first person who went on the moon, but
very few people remember the names of the second person. However, even if he ıs the second
one, there are strategies for this kind of situation. Thıs kınd of circumstances are defined as
repositioning. Ries & Trout (2006, p.63).
As per Ries & Trout, to get into the mind of a person, there are two possible ways, whıch
are to the easy one and the hard one. Positioning is not something related with the product,
ınstead positioning is what ıs ın the mind of the prospect. (Ries & Trout, 2006).
The positioning requires consistency, once you are in the mind of the person, ıt should be saved
for years. Very often companies forget how they became popular and successful where, they
change the positioning of communication. Generally, ıt ıs an incorrect strategy as per Trout. For
example, when the car rental company Avis had changed their successful abstain: “Avis ıs only
No. 2 in rent-a-cars, but ıf Avıs try harder.” to the less successful; “Avis is going to be No. 1”.
RECOMMENDATION
If all companıes follow the STP model, the marketing strategies will be much more
productive and efficient. By segmenting the target market, targeting the potential customers and
positioning the products and services properly in the marketplace, the company can grow the
business at a faster rate. However, the three concepts, the STP Concept as descrıbe above are
ıdeal, if the company want marketing efforts to be effective within the marketplace.With
segmenting target market, targeting the potential customers along with appropriate positioning
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services and products appropriately in market place where company could grow business at
faster rate.
On the contrary, these three concepts of STP provides above ideal description and in case
any organization has need of efforts of marketing for effective within market place. On basis of
differentiating successfully related to contributions through market competitors in consumer
minds with reference to market positioning. It has been recommended that business should
determine and build image related to specific features and benefits which offer added value
through perspective of customer and ensuring that clear communication deliver these attributes
on different aspects. Success of segmentation, targeting and positioning depends upon “ how
well marketing manager is able to avail information about market and customer. Accuracy and
timing of market information plays an important role. For instance- manager should have right
information about what kind of people give preference to which product (Lutz and Newlands,
2018). Inaccuracy in information collection occurs when marketing team members are less
motivated and willingness for work and they fill market data by themselves. To maintaining
quality of information manager should use more technology like CRM, Marketo, MailChimp.
And Optimove.
Manager should also develop customised marketing matrix for their organisation as every
business has different marketing objective like some wants to achieve higher sale, where some
are eager to increase product and brand awareness for their organisation and product. Marketing
department also have should co-ordination with different departmenet because it cannot work
alone to satisfies the buyer need (Walters, 2018) Like HR department helps marketing team to
enhance their communication and interpersonal skill so that they a can share better relationship
with buyers. Return on investment made by marketing department should be analyse before
choose any marketing strategies. Manager should not lose their insight on cost of STP process in
comparison of outcome came by process. Like- if manager spend more money to analyse need
of small group of people, it can be consider as irrational decision because size of customer play a
significant role in starting the STP process.
CONCLUSION
From the above report it had been concluded that process of STP could be applied on
both cases whether it is business to business or business to customer marketing. Apart from this,
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there are various variables which are applied in segmenting market on basis of characteristics of
customer and business could be elaborated with application of independent variables on buyer
type. Therefore, for creating a positioning report for divisions, there are nevertheless methods. It
has shown that segmentation, targeting and positioning where STP process is replicated as tool
for generating better awareness of product to potential and loyal customers. In the same series, to
segment market in appropriate aspect and for targeting essential customers with aim to attain
new markets along with various statistical methods should be fixed. Segmentation and targeting
help in making effective marketing mix for buyer . Positioning should be done proper analyses
because once an image is attached with company and its product, it will remain in customer mind
for long time. Also, organisation should not change its positioning effort so many times because
it will confuse the buyer and losses their trust on particular brand. STP process hugely depend
upon efficiency of marketing personnel. HR manager should render them on how to gather more
accurate data, how to analyse and interpreter the given data.
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REFERENCES
Books and journals
(Raynor and Weinberg, 2004, p.8). Raynor, Michael E., Weinberg, Howard S. (2004)
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Journal of Retail & Distribution Management, 19(3), 4-10
Grunert, K. G., 2018. International segmentation in the food domain: Issues and
approaches. Food Research International.
Kotler P. (2001) Marketing Management Millennium Edition, Tenth Edition, New Jersey,
Prentice-Hall, Inc.
Kotler, P. & Keller K. L. (2005), Marketing Management, 12th edition, Pearson Prentice Hall.
Kotler, P. (1999), Kotlers marknadsföring, Liber, Malmö.
Kotler, P. (2004) Marketing Management, Canada, Pearson Education
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Lutz, C. and Newlands, G., 2018. Consumer segmentation within the sharing economy: The case
of Airbnb. Journal of Business Research. 88. pp.187-196.
McKenna (1985, p.15)
Ohmae, K., 2016. MARKETING STRATEGY FOR VALUE EXPLORATION. Marketing For
Competitiveness: Asia To The World-In The Age Of Digital Consumers, p.175.
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Walters, M., 2018. Development and demonstration of a Customer Super-Profiling tool utilising
data analytics for alternative targeting in marketing campaigns.
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