STP (Segmentation, Targeting and Positioning) marketing is also called strategic marketing, involves finding correct segment in which to market your product, identify the proper target market and positioning the product to create maximum profits. The most important of STP marketing is determining exactly what benefits your product offers and who will benefit most from using it.
STP is important for marketer to create a competitive advantage and marketing plan designed specifically for the customers who will be most likely to buy the product. The STP process allows marketer to identify the correct segment to market the product and use the marketing mix to maximize profits.
Marketing Strategy: Segmentation, Targeting and Positioning
Segmentation, targeting and positioning are essential parts in the marketing strategy that can help company to market their product better using the appropriate marketing mix. The following diagram illustrates the steps and connection between these three important plan that used by marketers to market their product efficiently. [pic]
Diagram 1: The main steps in market segmentation, targeting and positioning Source: Doyle and Stern (2006)
Market consists of customers and customers vary from each other. The variation are depends on factors such as resources, wants, buying attitude, locations and buying practice. Segmentation means dividing a market by certain criteria such as geographical, demographic, psychographic and behavioral. By dividing the market, a marketer can easily identify what type of segment is suitable for the chosen product and large market can be divided into smaller segments which can be managed more efficiently and effectively.
These criteria or variables that be used for segmentation are as follows:
(1) Geographic Segmentation
It refers to location including regions, continent, country, area size, village, city and the climate. A company needs to put attention on variability of geographic needs and wants.
(2) Demographic Segmentation
It refers to measureable statistics such as income, age, gender, education, occupation, religion, nationality, race, language and family size. It’s crucial to consider the demographic factors while defining market strategy.
(3) Psychographic Segmentation
It refers to a segment of lifestyle, personality, attitudes and values. A segment having demographically grouped customers may have different psychographic characteristics.
(4) Behavioral Segmentation
Other than the above, another basis for segmentation is behavioral segmentation. This is the most favorable segmentation as it uses the variables that really close to the product itself. Buying status, buying role and user type are the common behavioral segmentation. Some customers are brand loyal; they tend to stick with their preferred brand.
Effective segmentation is achieved when customers sharing the similar patterns of demand are grouped together, where each group different in the pattern of demand from other segments in the market. Basically, all the following have to be considered before segmentation: (1) Measureable: Able to measure in terms of potential customers in each segment which means it should be able to tell how many potential customers as well as how many competitors in the same segment. (2) Accessible: Able to reach selected market targets with its individual marketing efforts which means...