STP Marketing Model
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The University of Nairobi**We aren't endorsed by this school
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ECON 197
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Dec 20, 2024
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STP Marketing Model: Segmentation, Targeting, and Positioning 1STP MARKETING MODEL: SEGMENTATION, TARGETING, AND POSITIONINGBy (Name)Course University City Date
STP Marketing Model: Segmentation, Targeting, and Positioning 2Table of Contents1.Introduction..............................................................................................................................32.Analysis....................................................................................................................................32.1.Segmentation...................................................................................................................3Definition and Explanation......................................................................................................3Importance of Segmentation....................................................................................................4Critical Evaluation....................................................................................................................42.2.Targeting..........................................................................................................................5Definition and explanation.......................................................................................................5Importance of Targeting...........................................................................................................5Critical Evaluation....................................................................................................................62.3.Positioning........................................................................................................................7Definition and explanation.......................................................................................................7Techniques for Effective Positioning.......................................................................................8Critical Evaluation....................................................................................................................92.4.Integration of STP.........................................................................................................103.Conclusion..............................................................................................................................11
STP Marketing Model: Segmentation, Targeting, and Positioning 3STP Marketing Model: Segmentation, Targeting, and Positioning1.Introduction Marketing concepts such as the segmentation, targeting, and positioning (STP) model is acore principle of marketing used by organizations in determining consumer groups, choosing the most appropriate groups out of the available ones, and defining the appropriate marketing communication strategy towards the selected segments. Specifically, the STP model helps businesses to analyze a particular market systematically and come up with a better marketing approach that can increase the level of customer attraction and reduce competition. This essay assesses the elements o of STP (segmentation, targeting and positioning), the functions, strengthsand weaknesses involved.2.Analysis 2.1.SegmentationDefinition and Explanation This market classification process splits a large market into micro segments, which can be handled conveniently by marketing personnel by aspects of similarity. Segmentation according to George (2021) is the act of classifying consumers into groups depending on aspects like age, geographical location, income and other related characteristics. In this regard, the common types of segmentation are shown in the table below:Table 1: Types of SegmentationDemographic Segmentation Groups consumers by measurable traits such as age, gender, and education.Geographic Segmentation Categorizes consumers based on their physical location.
STP Marketing Model: Segmentation, Targeting, and Positioning 4Psychological Segmentation Focuses on consumer lifestyles, values, and interests.Behavioral Segmentation Identifies patterns based on consumer behavior, such as brand loyalty or purchase frequency (Decker, 2023).Importance of Segmentation Segmentation is therefore useful in coming up with well-defined marketing strategies thatimprove resource allocation and also help in understanding customer needs. For instance, Tesco has applied geographic segmentation to address the customers in urban and suburban settings, and different store formats, for instance, Tesco Express to fix the city’s clients and more extensive stores for the suburban families (Nelsen IQ, 2024). Porsche too divides its customer base into groups like ‘top guns’ and ‘bon vivants’ to offer them a proper marketing message that would appeal to the specific types of customers Pardo (2017).Critical Evaluation However, segmentation is not without some draw back. There are thin potential risks, chiefly, that it causes over-segmentation and subsequently depletes the capacity of obtaining economies of scale (Rajagopal, 2016). However, the collection of detailed data is sometimes difficult and expensive, which makes it difficult to segment (Ennew et al., 2017). However, a sound segmentation remains key to designing customer-driven strategies that target the wide range of consumers.
STP Marketing Model: Segmentation, Targeting, and Positioning 52.2.TargetingDefinition and explanation While it is the most important step that comes after segmentation, it focuses on choosing the most suitable segments to target. This step ensures that resources dedicated to marketing are paid to the groups that have the highest returns possible and or great strategic importance. Andaleeb (2016) points out that to achieve effective targeting, marketers should assess segment on the grounds of size, growth rate, competitiveness, and suitability to the firm’s goals. This evaluation provides a measure of guarantee that selected segments are those that give the best chances of success in the market. In this regard, the main types of targeting strategies include undifferentiated marketing, differentiated marketing, concentrated (niche) marketing, and micromarketing. Importance of TargetingTargeting is important because it forms the basis for the direction of marketing activities in line with the desires of some chosen market segments. The tailored nature of niche strategies means that developing value propositions is probably the most satisfying step for firms. This increases marketing effectiveness as the potential segments are directly marketed as against diluting marketing effort across whole markets, which may not be as effective (Andaleeb, 2016). And the end, customer engagement, customer loyalty and market share are improved. For example, Ford has its different car model to suit different target customers in the market, for instance Fiesta targeted for the young people while the Eco-Sport for elder customers (Le Meunier-FitzHugh, 2021).
STP Marketing Model: Segmentation, Targeting, and Positioning 6Critical EvaluationThe benefits of targeting are that it will be possible to deliver products and messages that meet the needs of customers therefore they will be happy to buy them. From a segmentation standpoint, firms are better able to appeal to and engage customers emotionally, so customer advocacy can be produced. Further, targeted marketing raises the level of return on investment, as the resources will be spent in those areas that would be most profitable (Ennew, Waite, and Waite, 2017). Promotional efforts are more effective when focused; customers tend to be inclined to engage with materials that are not only personalized, but tailored to their needs (George, 2021).However, the targeting strategy also poses certain threats.. There is, however, one major concern for marketers: non-targeted audiences may feel excluded. However, by concentrating on these profitable segments, a firm may well miss or ignore other segments that could realize further growth in the future (Schlegelmilch, 2022). This selective focus can also make it vulnerable to change in the market as a firm.By focusing on these specific areas, it also paints a picture that can make a firm can be easily affected by change in the market as known from the case of Fransaker Morrison. If the targeted segment is getting smaller or changing its buying habits, which is not uncommon, more revenue becomes at risk if the company does not adjust its campaign. Such flexibility means that targeting needs to be constantly monitored, and its effect needs to be assessed regularly and to ascertain that targeting efforts remain useful (Andaleeb, 2016).Another weakness is the possibility to face with the problems connected with the lack of resources, critical for the company. While approach marketing being a form of individual or differential or micromarketing invariably requires extensive resources in research, product
STP Marketing Model: Segmentation, Targeting, and Positioning 7development, and know market segmentation strategies. Small companies may consider these investments difficult; hence, they would struggle to execute integration of perfect targeting to their optimal levels (Rajagopal, 2016). Also, there are possible ethical issues that may be experienced when its targeting strategies are considered to be aggressive and exploitative on certain segments or violate privacy rights particularly with data driven marketing strategies (George, 2021).2.3.PositioningDefinition and explanation The last stage of STP is that of positioning where an organization shapes the perception of its target market regarding the specific product or brand. This stage makes it possible to carve a competitive niche for a brand due to the presence of distinctive selling points, propositions or attributes that conforms to the perceived consumer asset requirements (Le Meunier-FitzHugh, 2021). With the help of positioning, consumers can easily grasp the significance of the product and reasons that cause it to be perceived as unique among competitors. It implies the strategic location of a product within a particular market compared to rival products and how it meets the needs of selected consumers. It guarantees that a brand the public can understand and relate to byassociating the communication with the features of segments in the target market (Decker, 2023).This positioning has to be a consistent and credible to gain consumer trust and their lifetime patronage (Le Meunier-FitzHugh, 2021).It is impossible to overestimate the importance of position for the formation of a brand, for the creation of contrast and for the preservation of competitive advantage. For example, Apple’s strategic business themes of simplicity, innovation, and premium quality make it to earn an exceptional reputation for being a leading technology company which can capture the
STP Marketing Model: Segmentation, Targeting, and Positioning 8attention of a sophisticated consumer who is interested in technology and quality products (Saqib, 2021). Such positioning is backed by disseminating the similar message unit and unification of design components of the advertisements with those of the packages of the product.Techniques for Effective PositioningThe positioning map is one of the more important tools in positioning and can be used to plot a brand on a scale of relevant attributes in relation to its competitors (Decker, 2023).). The map serves to show marketers how their brand is positioned in the market and where it needs fixing or new directions. Product positioning maps help firms formulate right approaches on howdifferent characteristics affect the consumer.Figure 1: Brand Positioning Map
STP Marketing Model: Segmentation, Targeting, and Positioning 9The value proposition is a second vital part of positioning, which defines the reasons whya particular consumer should choose one product instead of others. It describes the product and maps it on to the needs and wants of the target segment (consumers) (Le Meunier-FitzHugh, 2021). Perhaps, a firm value proposition statement strengthens the advertising message by signifying the slice of market that the product occupies.One good example of positioning is Disney’s themed stores where the positive association of using the brand name and its entertainment value focuses on the product as a shopping experience, particularly the characters and stories behind them (Rajagopal, 2016). This strategy makes consumers feel close to the company, can work to deepen brand loyalty, and ultimately, increase revenue.North Face’s marketing strategy as a brand is aimed at the image of relevance and responsibility: the quality of the products and sustainable approach attracts both the target consumer, who is an active admirer of nature, and the environmentally conscious customer (Adweek Staff, 2024). The brand differentiation has therefore been established doing well in market positioning for the products to fit in the outdoor and fashion markets.Critical EvaluationScholars state that positioning has several advantages: defining a persuasive brand image,and attaining a better position against competitors and thereby can lead to improved customer loyalty and brand assets (Le Meunier-FitzHugh, 2021). Competitive positioning enables the target consumers to identify and recall a particular brand and hence achieving a long market dominance. However, something known as positioning is an issue. For this reason, one major disadvantage is the challenge of relocate or repositioning a brand once people get a particular perception. When a company wishes to change the entire image, whetherDue to shifting market
STP Marketing Model: Segmentation, Targeting, and Positioning 10needs or the introduction of new products and services, the clients have refused to accept these changes since Long go (Schlegelmilch, 2022). This rigidity can limit the way a brand of garment changes with the likely consumer trends or market forces.This above discussion shows that consistency is the key ingredient for the successful implementation of positioning strategies. Major brands that post messages on social media platforms should avoid a situation where they give differing information and time and again end up reversing their image, which causes consumers to switch allegiance. However, the concept of positioning has noted to require constant check given that business environments, the consumers in particular have dynamic sentiments. For example, consumer value changes from luxury regime to sustainable economy, and if a firm is associated with luxury but does not follow environmentally friendly practices, it may become irrelevant (George, 2021).Further, the strategic position should involve significant commitments to market research,product and brand management. It shall however be argued that sustained efforts of this nature may prove hard for the small business operations, possibly constraining their competitiveness against strategically positioned large firms (Rajagopal, 2016).2.4.Integration of STPSegmentation, targeting, and positioning are tightly linked, and this guarantees great success in all of the marketing goals. From the same source Schlegelmilch (2022), the author pointed out that both of these components are interconnected; positioning requires targeting, and targeting requires segmentation. STP elements are interrelated making it easy to match a product and its target group, increasing the efficiency and effectiveness of marketing (George, 2021).Coordinating these steps results in a targeted marketing approach that generate greater returns on marketing investment by focusing on areas of greatest utility (Ennew, Waite, and
STP Marketing Model: Segmentation, Targeting, and Positioning 11Waite, 2017). For example, knowledge of consumer segments enhances satisfaction of customer needs by creating appealing value propositions resulting in customer loyalty (Andaleeb, 2016). On the other hand, errors in any of STP components result in bad market fit, low sales revenues, and reduced competitive advantage (Schlegelmilch, 2022).Basically, the integration of STP is most crucial at this juncture since consumer behaviour is continually changing given the increasing uptake of technology. It is possible to stay relevant and competitive by continuing to manage flexibility and re- segments, targets, positioning strategies (Le Meunier-FitzHugh, 2021). And this adaptability is critical in responding to the threats created by technologies and the evolving customer demands.3.ConclusionIn conclusion, it is important for marketers to continue using the STP model as a guide in formulating market and customer-oriented strategies. It gives a step-by-step sequence that a business organization follows from market analysis to message development, making sure that the products developed or to be developed are market appropriate and hold a competitive edge. As with every model, there are disadvantages; segments may be excluded from the strategy and there is a certain degree of rigidity in repositioning. As with every model, it has endless benefits in the way it can increase relevance, and customer satisfaction, cut costs and provide competitiveadvantage. Through continuous evaluation of market dynamics and the strategic balance of market segmentation, targeting and positioning, organisations can perpetually achieve growth, relevant competitiveness within the fluid environment.
STP Marketing Model: Segmentation, Targeting, and Positioning 12ReferencesAdweek Staff., 2024. The speed of culture podcast: the evolution of The North Face.[Online]. Adweek.Available at: https://www.adweek.com/brand-marketing/the-speed-of-culture-podcast-the-evolution-of-the-north-face/. (Accessed: 23 October 2024)Andaleeb, S.S., 2016. Market segmentation, targeting, and positioning. In: S.S. Andaleeb and K. Hasan. Eds. Strategic marketing management in Asia. Leeds: Emerald Group Publishing Limited, pp. 179-207. https://doi.org/10.1108/978-1-78635-746-520161006. Decker, A., 2023. Segmentation, targeting, & positioning (STP marketing): The marketer's guide. HubSpot. Available at: <https://blog.hubspot.com/marketing/segmentation-targeting-positioning>(Accessed: 23 October 2024). Ennew, C., Waite, N. and Waite, R., 2017. Financial services marketing: An international guide to principles and practice. London: Routledge.George, R., 2021. Marketing tourism and hospitality: Concepts and cases. Cham: Springer Nature.Le Meunier-FitzHugh, K., 2021. Marketing: a very short introduction. New York: Oxford University Press, USA.Nelsen IQ., 2024. Market segmentation examples. Nielsen Consumer LLC. [online] Available at:<https://nielseniq.com/global/en/info/market-segmentation-examples/Rajagopal, R., 2016. Sustainable growth in global markets. New York: Palgrave Macmillan. Saqib, N., 2021. ‘Positioning strategies: a literature review’, Journal of Cardiovascular Disease Research [e-journal] 6(6), pp.2543-2555. Available at: <https://jcdronline.org/admin/Uploads/Files/6245cc49e84644.42011977.pdf> (Accessed: 23 October 2024).
STP Marketing Model: Segmentation, Targeting, and Positioning 13Schlegelmilch, B. B., 2022. Global marketing strategy. Cham: Springer International Publishing.