'STP' is no unusual term to the 'Marketing-Homie.'
This quick guide is for the rest of those who could use a bit of help in understanding the technicalities of the Marketing World.
Abbreviated as STP for ease - the Segmentation, Targeting and Positioning model is quite a familiar and timely approach to strategizing in marketing today.
As the name suggests, one can observe this model to direct a business's focus towards identifying its customer base more specifically (segmentation) and to drive the business to be more closer to its customers and build long lasting customer relationships by prioritizing the means of meeting the ends posed by individual interest groups (targeting) and finally delivering personalized experiences catering to these different audiences (positioning) unlike other marketing models that are product centered.
Why is an STP approach a worthy option to consider?
More often than not, businesses especially startups get caught up in trying to tackle the bigger picture and end up failing in their attempts to please people who do not want their products or services to begin with. It is an unfortunate waste of time and resources.
One must keep in mind that succeeding in business depends simply on selling your proposition in whichever form it may be. And trust me, your proposition is never going to appeal to every single consumer out there. This is fact. Sad as this may sound, it still gives us a much needed reality check and that is, to figure out who is likely to buy what we have on offer and to market it directly to that person or group. This is where STP comes in handy.
A Walk Down STP Lane.
S: Start with Segmenting your Market
The first step you take under this approach is to segment or breakdown your overall market into specific or unique niches. The strategy gives you 4 standard ways of segmenting.
1.Demographic Segmentation: gender, age, ethnicity religion, income, education, marital status, occupation, cultural practices, family size etc.
2. Geographic Segmentation: regional breakdown of the market and locating needs that are more specific to these areas
3.Psychographic Segmentation: identifies consumer lifestyles and personality traits on the premise that these psychographic elements influence the buying behavior of consumers and potentially the chances of developing habits in them
4.Behavioral Segmentation: identifies consumer behavior based on their knowledge and usage of the product or service in order to influence their buying decisions. The premise here is that consumers tend to be brand loyal or competitor loyal and sometimes brand-neutral based on these two factors.
Having understood the ways of breaking it down, the next most important thing to remember is that each market segment must be homogenous and unique in terms of its overall nature once segmentation has been carried out, if done correctly.
In simple terms this means that a single market segment should be homogenous on the inside and heterogeneous externally.
T: Target. Target. Target
Now that you've broken it down and hopefully have in place clearly differentiated and unique segments to work with, you can tick off the check box on 'Targeting' when you have the answers to these questions.
Firstly in Targeting - pick your favorite segment (the target market under scrutiny).
Next, engage in questioning yourself and your team as to whether;
a. the size of the segment is justifiable and proportionate to the criteria
b. the segment benefits from the product or service/ it provides a solution to a key issue faced by the segment therefore, relevant
c. the segment has the buying power needed to push sales
d. the segment can be reached by your communication channels/marketing messages
e. the segment is identified within its unique sphere and the proposition offered also stands to be unique from those offered to other segments
Once you've understood and carefully picked out your target market out of the diverse segments in play, you can then find yourself and your product resonating with the right people. Defining your target market can be tricky and misleading. The most crucial point of getting your strategy right I would say. Hence, it is important to keep your head in the game a 100% at this stage.
Target them wrong and you've got yourself a business killer.
P: Positioning - Telling them your story
Positioning is simply about telling your story.
But if I am to get technical about it, it is about projecting clearly what the product does and who it is for. Ogilvy goes on the lines of product differentiation and says that positioning causes similar products to serve different purposes.
If your business can tell the consumers something they have never heard before and drive them to tingle with excitement about using the product, or tell them something that comforts them or gives them confidence and make them want to use it because the change in perceptions makes them feel good about themselves - you can pat yourself on the back for having positioned yourself well enough.
Take a look at these two campaigns to get an idea of some interesting positioning ideas by companies in the recent past: Dove Beauty Sketches (You are more beautiful than you think), Tanishq India with Deepika Padukone - Mother's Day Campaign 2015
Positioning is also about building trust and garnering a returning customer every single day. This is where it is important that what you say is different from your competitor and moreover, credible and realistic as well. People who look at your brand will always perceive you, relative to your competitor. Your story will set you apart from your competitor and drive some conversions in your favor.
There are instances when positions like "Red Bull gives you wings" still make the cut and though it may sound like an unrealistic and deceiving story line to run with, it is creative, fun and definitely stands out to most people.
If I am to give you a quick 4 -step guideline to positioning, here is a useful infographic I found that captures the essence of positioning discussed so far. Asking yourself these four questions can put your position in perspective and give you a story to talk about.
Having walked down STP lane with me on this 5 minute read, I'd like to think that kick-starting on strategizing may be a walk in the park for you now. Even if it is not just yet, let me tell you that not all cases come easy. With a little bit of practice and experience gained along the way - you will be able to put your STP starter skills to good use.
All in good time!
A Passionate MUNer and Youth Advocate/ Entrepreneur and Business Enthusiast from Sri Lanka.