How to create an STP Marketing Strategy?

Step-1: Define Your Market

Segmenting your market into manageable groups can be an effective approach to capturing it. To create a marketing plan, it is essential to define:

• Total Attainable Market (TAM): It indicated the total market demand for your services or products. It is the biggest available market that can generate maximum revenue for your business.
• Serviceable Attainable Market (SAM): It lies within TAM, and it is defined by your geographical constraints or product specialization.
• Serviceable Obtainable Market (SOM): It lies within SAM, and it is the portion of the market you can realistically reach after considering certain factors such as your budget, competition, and product differentiation.

Step-2: Create Audience Segments

Once you have identified your market, the next step is to segment the audience within that market. This can be done based on various criteria such as behavior, age, geography, psychographics, demographics, and more. By segmenting your audience, you can achieve your marketing goals more effectively and improve your overall marketing efforts.

Step-3: Identify Attractive Segments

Once you have segmented your market, it is essential to assess the appeal of each segment. This can be done by using metrics such as growth potential, return on investment, and segment size estimation. The more appealing segment will either be more substantial or offer greater profitability, benefits, and accessibility. This evaluation helps you to determine which segments to prioritize and invest your marketing efforts into for the most significant impact.

Step-4: Evaluate Market Competition

Once you have determined the most promising segments for your marketing campaign, it is important to assess the competition your product will face in the market. To do this, you can create a table comparing the features of your product with those of your competitors, conduct a SWOT analysis, and identify gaps in the market. By doing so, you can determine the most effective way to enter your target customer segment.

Step-5: Fix Your Positioning

Once you have completed the aforementioned steps, it is time to concentrate on positioning your product in the market. You can choose to implement any of the following positioning strategies, or a combination of them, to determine your product’s positioning.

Step-6: Determine Marketing Mix

The final step of the STP marketing model is to select your marketing mix that will strengthen your positioning. It consists of Seven Ps: Product, Price, Promotions, Place, People, Process, and Physical Evidence.

Benefits of STP Marketing

• Defines a specific target market to increase sales.
• Positions products directly at precise target markets.
• Identifies gaps in the market.
• Avoids unnecessary advertising expenses by targeting specific segments.
• Helps small businesses find success in niche markets.
• Assists marketers in spotting and comparing marketing opportunities.
• Enables improved allocation of marketing budgets.
• Identifies profitable segments.
• Facilitates the development of appropriate service packages for each market segment.

Further Reading:

Having gained a solid understanding of the STP framework, let’s now delve into Walmart’s application of Segmentation, Targeting, and Positioning in their marketing strategies.

Segmentation, Targeting, and Positioning (STP) Marketing

 McDonald’s is a fast-food restaurant chain that has adapted its positioning over time to appeal to changing customer needs and preferences.

• In response to growing concerns about health and nutrition, McDonald’s has introduced a range of healthier menu items, such as salads and fruit smoothies.
• In response to changing consumer trends, McDonald’s has introduced an all-day breakfast and expanded its menu to include a wider variety of food items.

Defensive Positioning: Defensive positioning is a strategy where a company positions itself in a way that protects it from competitive threats or market challenges.

Samsung has a defensive positioning strategy that includes investing in R&D, building a strong brand, diversifying its product portfolio, and building strong customer relationships. This strategy has helped Samsung maintain its position as a leading player in the technology industry and protect its market position from competitors like Apple and Huawei.

Pre-emptive Positioning: Preemptive positioning is a strategy in which a company positions itself to be the first to market with a new product or service.

Apple’s preemptive positioning strategy involves introducing innovative products that set the standard for the industry.

• The iPhone, iPod, iPad, and Apple Watch were some of the first products in their respective categories, establishing Apple as a leader in technological innovation. This strategy has helped Apple maintain its dominant position in the technology industry.

Segmentation, Targeting, and Positioning (STP) Marketing

Table Of Contents

1. Overview
2. Segmentation
3. Targeting
4. Positioning
5. How to create an STP Marketing Strategy?
6. Benefits of STP Marketing

Segmentation, Targeting, and Positioning are referred to as the STP model in marketing. According to this strategy, the market is divided into various segments, specific consumer groups are identified and targeted with customized marketing campaigns that address their particular preferences and requirements, and your products or services are positioned in a way that appeals to their needs and wants.

Due to the STP model's efficacy and efficiency in customer-focused marketing, successful organizations have long embraced it as a strategy. The STP approach stresses knowing the customer and their experience rather than only emphasizing product promotion. This results in a more beneficial and richer relationship between the consumer and the organization.

Segmentation

The initial phases in the STP (Segmentation, Targeting, Positioning) marketing process is segmentation. The major objective of this stage is to split a bigger audience into more manageable groups or segments according to predetermined standards. In this procedure, clients or future clients are divided into several categories according to numerous differentiating traits.

Companies may better target their marketing tactics to the distinct demands and preferences of each market group by segmenting the market, which will eventually result in more successful marketing campaigns and higher levels of consumer satisfaction.

Four primary types of segmentation are.

Targeting

The following step inside the STP model is targeting wherein you make a decision which segments are really worth that specialize in on your marketing campaign. ideally, you ought to recall the subsequent standards to decide the maximum attractive segments to goal.

Positioning

Positioning is a method utilized by organizations to shape the perception in their products or services inside the minds of their meant audience. through positioning, companies purpose to highlight the distinct capabilities and advantages in their brand’s presenting that units it apart from competitors.
A completely unique promoting Proposition (USP) is a key feature or characteristic of a brand that units it aside from its competition inside the marketplace. With so many comparable services or products available, having a strong USP can make your emblem extra memorable and give it a aggressive facet. it's far the precise advantage that your brand offers to persuade customers to select your products or services over others. To successfully speak your USP for your target audience, you want to set up a clean emblem positioning.

A positioning assertion is a concise paragraph that describes how a logo desires to be perceived by way of its target market. It makes a specialty of the number one advantage of the service or product for the goal marketplace, and should encompass:
A description of the target marketplace and its unique wishes or desires must be based on market research.

The class your product or service belongs to and how it meets the wishes of customers. This gives context for customers to evaluate your offering.

One factor of differentiation that units your service or product apart from competition, is stated from the client’s attitude. This must give an explanation for how your differentiation solves the consumer’s problem or facilitates them obtain their goals.

Evidence that supports your brand’s claims and makes them credible.

To create a successful positioning strategy, it’s vital to have a radical understanding of the marketplace you’re competing in. This involves identifying your agency’s particular attributes and how they set you aside from your competitors, as well As understanding the marketplace’s current conditions and potential possibilities. The marketplace position strategies described beneath are applicable to a big wide variety of situations.

Mono-Segment positioning: Mono-segment positioning is a marketing strategy that focuses on creating a product and marketing program that caters to the preferences of a single market segment. This approach can provide a significant advantage to the brand within the specific target segment, but it may not generate many sales from customers in other segments. It is most effective when used in conjunction with mass marketing efforts.

Tesla utilizes a mono-segment positioning strategy by targeting customers interested in sustainable transportation and energy solutions.

• Tesla’s products and services cater specifically to this market with features like long-range electric batteries and a network of fast-charging stations, appealing to environmentally conscious consumers who value innovation and sustainability. This allows Tesla to differentiate itself from competitors and establish a strong brand identity within the target segment.

Multi-Segment positioning: Multi-segment positioning is a strategy where a company targets multiple segments of customers with different products or services that are tailored to each segment. This is an attractive strategy since it provides higher economies of scale, requires smaller investments, and avoids the dispersion of managerial attention.

Nestle produces a wide range of products that target various market segments, including chocolate and confectionery products for children and young adults, coffee for adults, and baby food and formula for parents.

• Nestlé's multi-segment positioning allows the company to meet the specific needs and preferences of each segment by tailoring its marketing strategies, product features, and packaging design to each group. This approach has enabled Nestle to be successful in different markets and segments around the world, leading to increased brand loyalty and customer satisfaction.

Standby positioning: Standby positioning, also known as backup or reserve positioning, is a strategy where a company positions itself as an alternative or secondary option for customers in case their primary choice is not available or satisfactory.

Netflix is a video streaming service that has positioned itself as a standby option for customers who want to watch movies and TV shows on-on demand.

• The company’s subscription-based model allows customers to access a wide range of content without needing to commit to a cable or satellite TV subscription.
• Netflix has positioned itself as an alternative to traditional movie rental services like Blockbuster, which have largely gone out of business due to the rise of digital streaming.

Imitative positioning: Imitative positioning is a strategy where a company positions itself as a competitor to an existing product or service, often by imitating the features or benefits of the existing product or service.

Pepsi is a soft drink company that has positioned itself as a competitor to Coca-Cola, a dominant player in the soft drink industry.

• Pepsi has imitated many of the features and benefits of Coca-Cola, such as offering a similar taste and packaging, while also trying to differentiate itself with unique marketing campaigns and product offerings.

Adaptive positioning: This consists of periodically repositioning a brand to follow the evolution of the segment’s needs.

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