Segmenting, Targeting and Positioning

The STP process has three steps in order to allow a business to market their product to the right people.

The first step is to separate or segment the market into sections around the companies product or service. This step is usually very simple for many businesses as the market is already split into sections around gender, age and social class. For example, a car manufacturer would base its segmentation around whether they are selling luxury cars, family cars or basic cars and split the market into gender, age and income and base their next model around the best sector.

The next step is to then decide which market sector has the most potential for profit, sustainability and growth and then target that sector. This step is key as businesses constantly fight for market share in order to survive therefore targeting the wrong market due to poor research is punishing to both time and expenditure.

The final step is to position the product or service into the desired sector by evaluating each sector. This is usually done via the 4P's framework basing a decision around what price the product would sell at, to whom it would be targeted at, where you would sell it and how you would promote it. Obviously modern marketing is far more in depth as globalisation would encounter different cultures and economies.

The table on the left shows the processes at each stage of STP and crucially takes into account emerging segments which over time can become powerful.

Many large companies often rethink target market due to change in the market. The LINK directs you to an article on Starbucks' change in demographic from young college students to specific neighborhoods to then almost every demographic. This progressive change has allowed them, due to strong research and development, to compete with Mcdonalds for market share.

Although the model identifies the main components of completing the STP process successfully, it does not take into account the need for creating a brand image which can stand the test of time when marketed to it's desired audience.

A recent BLOG I stumbled upon looked at how the television show Postman Pat has been remade in order to keep up with todays kids. I think that his undying love for Postman Pat should not be tarnished because if you look at the bigger picture, Postman Pat has stood the test of time. Although targeted to children who don't have a large buying power, all merchandise sold has to be bought by the parents and even recently Specsavers have incorporated Pat into their advertising campaign which since being created in 1981 has definitely created an identity which targeted at the right market has been successful.