Marketing geeks are not unaware of the STP approach. It stands for segmentation, targeting and positioning and has an imperative part to play in modern marketing scenario. When it comes to most popular marketing models many experts count on it. It is only second to the most popular SWOT/TOWs matrix. STP being a relatively new concept can make even big in the future years.
Going in flashback around mid-1950s you will find that marketing approaches emphasized more on products than focusing on the target audience. Product differentiation is one example of the leading marketing strategy of the former years.
Coming back to the STP model, businesses rely upon it in creating marketing communications. This being useful in prioritizing propositions and preparing and delivering customized and appropriate messages for better customer engagement wins over many other contemporary marketing approaches.
In this approach, the audience comes first before the product or anything else. This makes communications more appealing and effective.
The below given diagram better exemplifies the approach:
Audience options > Audience selection > Production positioning
STP concentrates on commercial effectiveness with the selection of most important segments from the business perspective. It is followed by formulation of a marketing mix and product positioning strategy for every single segment.
Usefulness Of Segmentation, Targeting and Positioning For Digital Communications
When applied at a more strategic level STP approach is quite result-oriented for digital marketing as well. For instance, applying marketing personas can help in designing more appropriate digital communications than achieved with alternative tactical email customer segmentation approaches.
Though digital channels render new options for targeting prospects that were not previously available, it takes a big share of your budget for attaining the extreme results.
A brand can get the best customer response with new kind of offerings with online value propositions. This can come in the form of content, mobile apps or interactive tools on websites.
Deployment Of STP
Segmentation helps in identification of niches with their specific requirements, locating new customers in the market, providing effective and customized marketing messages.
Requirements and preferences of each segment are different and hence it is important to create marketing messages that can highlight the apt benefits and features required. It will work much better than the one size fits all approach.
Below given are the more popular ways to segment your audience:
Categorize the population by any combination of age, income, gender, marital status, education etc. For example, Firefox sells coolest things and is rightly associated with a young audience while Pampers is targeted to new parents with hygiene, dryness and comfort for the little ones.
By psychographics what is meant is personality and emotions of customers based on their behavior pertaining to buying preferences. This covers attitudes, lifestyle, interests, risk aversion, personality and traits of leadership, reading magazines and watching TV. Psychographics explain the businesses why their customers buy (or not buy).
Amongst various ways of collecting data from customers to comprehend their psychographic type interviews, surveys and customer data are more popular than others.
Interviews: As you talk to some people that broadly represent your target market you create opportunities for gathering useful qualitative data to comfortably establish what makes them take buying decisions. This method has one limitation which is the cost involved and difficulty level in its execution. Moreover, when the sample size is too small it may or may not represent the target audience.
Customer data: Making use of purchase data of your customers a business can generate understanding of which products category or type your customers are more inclined towards. This helps you predict the product they are likely to purchase.
Surveys: Though help touch base with a larger number of people they don’t get you insightful responses.
This category encompasses personal interests, recreational pursuits, holidays, entertainment etc. Hobbies like football watching are large enough to be easily targeted by businesses. Some companies have made it big with finding out these small niches.
Belief and value system
There will be hardly any person who does not follow one or other religion. Likewise, almost every civilian would have their own value system. This value system is developed with the religious, political, nationalistic and cultural beliefs and inclinations of a person.
An average man goes through 5 different life stages- infancy, childhood, youth, mature, old. There are businesses like Saga holidays that cater to the needs of age specific segment.
Segregating customers based on the country they live in. Extend further to bifurcate them on the grounds of region, area, metropolitan or rural location, population density or climatic conditions.
In this customers are segmented on the basis of their reaction to several marketing factors like nature of purchase, brand loyalty, usage level, and distribution channels used and alike.
It is nothing but the satisfaction provided to the consumer with use of a business’s product or service.
List of items as follows is all about the determinants of latent money-making prospects of every segment.
Criteria size: In order to justify market segmentation, it is essentially important to have an optimal market size.
Difference: There should be measurable differences between segments.
Money: Expected profit margin should be much higher to take care of unplanned marketing plans and other changes.
Accessible: Unless every segment is easily accessible to your team and your marketing messages have a good reach, it will not work for you.
Focus on different benefits: Each one of the different segments must have their own expectations from you.
Positioning is the last yet very important constituent of the STP process. This needs two variables to exemplify the market overview. It is very useful when it comes to identifying gaps in one’s own market, if there is any.
Whether you are an ecommerce business or a retail venture the STP approach is equally useful for the growth of your baby.