3870135-stp-marketing-model Ammended
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Dec 22, 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.Segmentation, Targeting, and Targeting..................................................................................32.1.Segmentation...................................................................................................................32.2.Targeting..........................................................................................................................42.3.Positioning........................................................................................................................62.4.Integration of STP.........................................................................................................113.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 are a core 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 for the selected segments. Specifically, the STP model helps businesses analyze a particular market systematically and come up with a better marketing approach that can increase the level of customer attraction and reduce competition. To provide a comprehensive understanding, this essay assesses the elements of STP (segmentation, targeting, and positioning), the functions, strengths and weaknesses involved. 2.Segmentation, Targeting, and Targeting 2.1.SegmentationSegmentation forms the foundation of the STP framework since it involves the process ofsplitting a large market into micro-segments, which can be handled conveniently by marketing personnel by aspects of similarity. According to George (2021), it is the act of classifying consumers into groups depending on aspects like age, geographical location, income, and other related characteristics. Table 1 below demonstrates the common types of segmentation: 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.Psychological Segmentation Focuses on consumer lifestyles, values, and
STP Marketing Model: Segmentation, Targeting, and Positioning 4interests.Behavioral Segmentation Identifies patterns based on consumer behavior, such as brand loyalty or purchase frequency (Decker, 2023).The importance of segmentation lies in its ability to inform well-defined marketing strategies that enhance resource allocation and improve understanding of 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 clientsand more extensive stores for 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 specific types of customers Pardo (2017). Having identified the importance of segmentation, it is necessary to determine its significant challenges. However, segmentation has critical drawbacks which are necessary to point out. 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, sound segmentation remains key to designing customer-driven strategies that target a wide range of consumers.2.2.TargetingBuilding upon segmentation, targeting identifies the most suitable segments to pursue. This step ensures that resources dedicated to marketing are paid to the groups that have the highest returns possible and are of great strategic importance. Andaleeb (2016) points out that to
STP Marketing Model: Segmentation, Targeting, and Positioning 5achieve effective targeting; marketers should assess segments 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 micro marketing. The strategic importance of targeting lies in directing marketing efforts effectively. 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 against diluting marketing efforts 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 different car models to suit different target customers in the market; for instance, the Fiesta targets young people, while the Eco-Sport is for older customers (Le Meunier-FitzHugh, 2021).The 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).
STP Marketing Model: Segmentation, Targeting, and Positioning 6However, while targeting can be highly effective, it comes with potential downsides. 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 to ascertain that targeting efforts remain useful (Andaleeb, 2016).Another weakness is the possibility of facing problems connected with the lack of resources, which is critical for the company. Approach marketing, being a form of individual differential or micro marketing, invariably requires extensive resources in research, product development, and knowing market segmentation strategies. Small companies may consider theseinvestments difficult; hence, they would struggle to execute the integration of perfect targeting totheir 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.PositioningThe role of positioning is further underscored by examples like Apple and Disney. This stage makes it possible to carve a competitive niche for a brand due to the presence of distinctiveselling points, propositions, or attributes that conform to the perceived consumer asset
STP Marketing Model: Segmentation, Targeting, and Positioning 7requirements (Le Meunier-FitzHugh, 2021). With the help of positioning, consumers can easily grasp the significance of the product and the 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 abrand the public can understand and relate to by associating the communication with the featuresof segments in the target market (Decker, 2023). This positioning has to be consistent and credible to gain consumer trust and 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 earn anexceptional reputation for being a leading technology company that can capture the attention of asophisticated 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.The 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 the right approaches to how different characteristics affect the consumer. Having analyzed what a positioning map is andits role, it is necessary to also comprehend what value positioning is and its role in the positioning aspect of the STP.
STP Marketing Model: Segmentation, Targeting, and Positioning 8Figure 1: Brand Positioning Map (Decker, 2023).The 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 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 theslice of the market that the product occupies.The 4 Ps (Product, Price, Place, Promotion) are one of the most vital tools of positioning and are critical while building the marketing mix. The product element deals with identifying key features, quality and benefits of the product that set it from the industries’ competitors. Another element of the value proposition is equally conveyed by price; for instance, a high price denotes quality and:selected attribute such as a very high price, may suggest premium services while a low price may appeal to the price-sensitive consumers. Location is the distribution channel, which means that the product is placed in those outlets with which the
STP Marketing Model: Segmentation, Targeting, and Positioning 9brand/audiovisual work aspires to the brand image—jewelry or champagne might be available only in elite shops, whereas home appliances can be purchased in electrical shops (George, 2021). Promotion connects all these elements by using communication strategies that offer appeals that correspond with the chosen positioning statements in a consistent message that is appropriate to the target market (Decker, 2023). For instance, North Face sells its brand image ofquality and sustainable apparel through a focused marketing approach, which it hammers on its environmental conservation agenda (Adweek Staff, 2024).The Product Life Cycle (PLC) is another vital aspect of positioning, guiding marketers in adapting their strategies as a product progresses through different stages: The four general stages of marketing are to address are introduction, growth, maturity, and decline. In the introduction phase, positioning is mostly centered on creating awareness and showing why the product has to be chosen. In the growth stage, attention is turned on the communication of competitive abilities in order to increase market share. This is where brand loyalty has to be defended and where the process of differentiation needs to be reinforced as competition increases (George, 2021). When linking the positioning with the PLC, one is confident that the positioning will deliver the right message at every stage of the product life cycle. Disney portrays this by shifting its modes of advertisement and image branding in order to sustain a pristine image of its products even when passing through their cycle that is within the market (Rajagopal, 2016).One good example of positioning is Disney’s themed stores, whereby 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.
STP Marketing Model: Segmentation, Targeting, and Positioning 10North 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). Brand differentiation has therefore been established, doing well in market positioning for the products to fit in the outdoor and fashion markets.Scholars state that positioning has several advantages: defining a persuasive brand image and attaining a better position against competitors, thereby leading to improved customer loyalty and brand assets (Le Meunier-FitzHugh, 2021). Competitive positioning enables the target consumers to identify and recall a particular brand, hence achieving long-term market dominance. However, something known as positioning is an issue. For this reason, one major disadvantage is the challenge of relocating or repositioning a brand once people get a particular perception. When a company wishes to change the entire image, whether due to shifting market needs 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 situations 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 been noted to require constant checks given that business environments, the consumers in particular, have dynamic sentiments. For example, consumer value changes from a luxury regime to a sustainable economy, and if a firm is associated with luxury but does not follow environmentally friendly practices, it may become irrelevant (George, 2021).
STP Marketing Model: Segmentation, Targeting, and Positioning 11Further, 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 small business operations, possibly constraining their competitiveness against strategically positioned large firms (Rajagopal, 2016).2.4.Integration of STPHowever, integrating STP can be resource-intensive as Schlegelmilch (2022) 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 generates greater returns on marketing investment by focusing on areas of greatest utility (Ennew, Waite, and Waite, 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 the STP components result in bad market fit, low sales revenues, and reduced competitive advantage (Schlegelmilch, 2022).Basically, the integration of STP is imperative at this juncture since consumer behavior iscontinually changing, given the increasing uptake of technology. It is possible to stay relevant and competitive by continuing to manage flexibility and re-segments, targets, and positioning strategies (Le Meunier-FitzHugh, 2021). This adaptability is critical in responding to the threats created by technologies and 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. By systematically moving from
STP Marketing Model: Segmentation, Targeting, and Positioning 12segmentation to targeting and positioning, businesses ensure that their products resonate with theright audiences and stand out competitively. 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 a competitive advantage. Through continuous evaluation of market dynamics and the strategic balance of market segmentation, targeting, and positioning, organizations can perpetually achieve growth and relevant competitiveness within the fluid environment.
STP Marketing Model: Segmentation, Targeting, and Positioning 13ReferencesAdweek 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 14Schlegelmilch, B. B., 2022. Global marketing strategy. Cham: Springer International Publishing.