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.