Segmentation, Targeting & Positioning: The Role of the STP Model in Marketing Strategy.
Successful marketing starts with knowing who to focus on and how to reach them. The STP model; Segmentation, Targeting, and Positioning, provides a proven framework to align products and services with the needs of distinct groups, sharpen campaigns, optimise resources, and build a stronger brand position.
By applying this model, marketers can move from broad assumptions to precise strategies, ensuring that effort and budget create maximum impact.
The STP model; Segmentation, Targeting, and Positioning, was popularised by Philip Kotler, often called the father of modern marketing. It provides a structured approach to market analysis and strategy development, encouraging businesses to segment markets, target the right groups, and position their brand with clarity.
Introduction to the STP Model.
Rather than treating the market as a single, undifferentiated audience, STP encourages you to:
Segment the market into meaningful groups.
Target the most attractive segments with tailored offers.
Position your brand and products in a way that resonates with those segments.
This approach helps organisations prioritise resources, tailor messages, and create competitive advantages in crowded marketplaces. When implemented thoughtfully, the STP model marketing strategy becomes a compass for product development, pricing, distribution, and communication.
Segmentation in Marketing: The Foundation of Effective Strategy.
Segmentation in marketing is about dividing a broad audience into smaller, more homogeneous groups. These groups share similar characteristics, needs, or behaviours. There are several bases for segmentation:
Demographic segmentation: age, gender, income, education, and family status.
Geographic segmentation: region, city size, climate.
Psychographic segmentation: values, lifestyles, personality.
Behavioural segmentation: buying occasions, loyalty, usage rate, benefits sought.
The goal is to identify segments that are sizeable, accessible, differentiable, and actionable. A sound market segmentation strategy considers both current needs and future potential.
For instance, a consumer electronics brand might segment by usage (daily commuters vs. gamers) and by price sensitivity (premium vs. budget-conscious buyers).
The key is to generate insights that inform product design and messaging, not just to map people into neat boxes.
Targeting in Marketing: Choosing the Right Segments.
Once segments are identified, the next step is targeting in marketing. Targeting involves evaluating each segment's attractiveness and determining which to serve. Criteria often include:
Market size and growth potential
Structural attractiveness (competition, entry barriers)
Alignment with company strengths and capabilities
Ability to reach the segment through available channels
Potential profitability and return on investment
There are several targeting strategies:
Undifferentiated (mass) marketing: treating the market as one large segment.
Differentiated (multi-segment) marketing: tailoring products and messages to multiple segments.
Concentrated (niche) marketing: focusing on a single, well-defined segment.
Micromarketing (local/individual): tailoring offerings at a very granular level.
Choosing the right approach depends on resource constraints, brand position, and long-term goals. A well-chosen targeting strategy helps ensure that the marketing mix (product, price, place, promotion) is coherent and compelling for the chosen audience.
Positioning in Marketing: Defining Your Brand Strategy.
Positioning in marketing is the process of crafting a durable, distinctive place in the minds of the target segments. It answers: What unique value does our brand offer, and why should customers choose us over competitors?
Effective positioning is grounded in customer insights, competitive analysis, and a clear value proposition. It often translates into a positioning statement, such as:
For [target segment], our [brand/product] is the [frame of reference] that delivers [key benefit] because [point of difference].
Positioning is closely tied to brand positioning strategy, and it guides messaging, creative direction, and product development.
It is also critical in competitive markets where multiple brands vie for similar needs. A strong positioning helps customers quickly understand what makes your offering different and why it matters to them.
The STP Framework in Practice: Aligning Strategy with Execution.
The STP framework links segmentation, targeting, and positioning into a cohesive marketing strategy. To put the STP framework into practice, most businesses follow a simple sequence:
Conduct thorough market research to identify meaningful segments. Use both quantitative data and qualitative insights to understand needs, pain points, and decision processes.
Evaluate segments against attractiveness criteria and your organisation’s capabilities. Consider synergy with existing products, distribution channels, and brand ethos.
Select target segments and articulate a positioning strategy for each. Decide whether you will differentiate by features, benefits, price, or experience.
Develop the marketing mix for each target segment. Product design, pricing, distribution, and promotion should reflect the positioning and meet the specific needs of the segment.
Test, measure, and refine. Monitor performance, gather feedback, and adjust segments, targeting, or positioning as markets evolve.
A practical example could be a mid-range smartphone brand using a segmented approach: targeting tech-savvy young professionals who prioritise camera quality and battery life.
Its positioning would highlight simplicity and creativity, differentiating against premium enterprise phones or budget student models.
The positioning for each segment should clearly articulate why the brand is the best choice for that segment, supported by messaging, bundles, and channel strategy.
Integrating STP with Broader Marketing Strategy.
The STP model complements other marketing frameworks, including the marketing mix (the 4 Ps) and customer-centric strategies. By grounding product development and communications in precise segments, firms can craft a brand positioning strategy that is both authentic and differentiated.
Philip Kotler’s work on customer-centricity and value creation reinforces the STP model’s relevance, showing that segmentation, targeting, and positioning are not academic exercises but practical tools for building sustainable advantage.
Key considerations when integrating STP into the broader strategy include:
Consistency across channels: Ensure that positioning is reinforced in product packaging, digital experiences, advertising, and customer service.
Market dynamics: Be aware of shifting demographics, technology trends, and economic conditions that can alter segment attractiveness.
Measurement and governance: Establish clear metrics for segment performance, targeting precision, and positioning effectiveness, with ongoing governance to adapt as needed.
The Role of the STP Framework in Modern Branding.
Brand positioning strategy is a central outcome of the STP process. A strong STP approach helps a brand articulate its unique value proposition and maintain a coherent identity across touchpoints.
In markets saturated with options, clear segmentation and purposeful targeting prevent message dilution and help customers understand why a brand is the right choice for their needs.
Moreover, the STP model supports the concept of a market segmentation strategy that scales. As brands grow, they can expand into adjacent segments using differentiated value propositions, while preserving core positioning for existing segments.
This balance between focus and growth is a hallmark of effective marketing strategy STP.
Summary.
Segmentation, targeting, and positioning remain foundational to successful marketing strategy. By carefully segmenting the market, selecting the most attractive targets, and crafting precise positioning, organisations can create compelling value propositions and allocate resources efficiently.
The STP model, and its well-documented lineage in Philip Kotler’s work, continues to offer a practical, adaptable framework for contemporary marketing. Whether you’re launching a new product, refreshing an existing brand, or entering a new market, a robust STP approach can sharpen your competitive edge, clarify your messaging, and drive sustainable growth.
In the end, the most effective marketing strategy STP is not about chasing every segment, but about choosing the right ones and differentiating in ways that truly resonate with those customers.