STP Marketing (Segmentation, Targeting, Positioning)

EPM

5 Dec 201908:25

Summary

TLDRToday's lesson delves into the STP marketing model: Segmentation, Targeting, and Positioning. It's crucial for businesses to identify specific customer segments rather than targeting everyone, as broad marketing can dilute the message's impact. By segmenting the market based on demographics, geography, psychographics, and behavior, companies can select the most attractive segments and position their products to appeal to those specific groups. The lesson illustrates how proper STP implementation can lead to increased sales and market dominance, using 'The 4-Hour Workweek' as a case study. It also touches on the model's advantages, such as precise targeting and market gap identification, and its disadvantages, like increased costs for tailored campaigns.

Takeaways

🧩 The STP marketing model stands for Segmentation, Targeting, and Positioning, which is a framework to improve marketing effectiveness.
🚫 Companies often make the mistake of trying to target everyone as their customer, which can dilute the appeal of their product or service.
🌐 Even global brands like Coca-Cola offer different products to cater to various customer segments, highlighting the importance of market segmentation.
📊 Segmentation involves dividing the market into groups based on criteria such as demographics, geography, psychographics, and behavior.
🎯 Targeting is about identifying the most attractive segments based on factors like size, growth potential, profitability, and ease of reach.
🏆 Positioning is about creating a unique value proposition in the market that differentiates your product from competitors in the eyes of customers.
🔑 There are three common ways to position a product: functional, symbolic, and experiential, each appealing to different customer needs.
📈 A market map or positioning map can visually represent how products are positioned relative to each other, revealing potential gaps in the market.
📚 The example of 'The 4-Hour Workweek' demonstrates the power of STP by segmenting, targeting small business owners, and positioning the book to appeal to their desire for more free time.
📈 Advantages of the STP model include increased sales, cost efficiency, and the ability to identify market gaps.
💰 Disadvantages include increased costs for producing multiple versions of products or services and the need for different marketing campaigns for each segment.
🔑 In summary, the STP model is a three-step process that helps businesses identify profitable customers and tailor their marketing and products to meet those customers' needs.

Q & A

What is the STP marketing model?
-The STP marketing model stands for Segmenting, Targeting, and Positioning. It is a framework designed to improve marketing by dividing the market into customer groups (segments), selecting the most attractive segments, and positioning the product in the marketplace to appeal to those segments.
Why is it a mistake for companies to think that anyone can be their customer?
-Thinking that anyone can be a customer can make it difficult to sell a product or service because no prospective customers will feel that the solution is tailored to their specific needs. It dilutes the marketing message and can lead to ineffective sales strategies.
Can you give an example of a company that operates in many countries but still tailors its products to different types of people?
-Coca-Cola is an example of a company that operates in over 200 countries and sells well over a billion products a day, yet it offers different products to suit different types of people, showing the importance of market segmentation.
What are the different criteria that can be used for market segmentation?
-Market segmentation can be based on demographic factors such as age, gender, income level, education level, marital status, geographic location, psychographic factors like lifestyle, hobbies, activities, opinions, political affiliation, and behavioral factors related to how they use the product.
How does demographic segmentation differ from psychographic segmentation?
-Demographic segmentation divides the market based on measurable characteristics like age, gender, and income, while psychographic segmentation focuses on people's lifestyle, hobbies, activities, and attitudes, which can explain why they choose to buy.
What is the purpose of the targeting step in the STP model?
-The targeting step involves deciding which segments identified during segmentation are the most attractive and commercially viable. It's about determining the size, growth potential, profitability, and ease of reaching these segments to focus marketing efforts effectively.
What factors should be considered when evaluating the attractiveness of a segment?
-Factors to consider include the size of the segment, its potential for growth, profitability, what customers in the segment are willing to pay, the lifetime value of a customer in the segment, and the ease of reaching the segment with marketing efforts.
What is the final step of the STP model and why is it important?
-The final step is positioning, where the product is mapped out against competitors in the minds of customers. It's important because it helps the product or service take a unique position in the market, creating a clear value proposition that differentiates it from competitors.
What are the three standard ways to position a product for competitive advantage?
-The three standard ways to position a product are functional positioning, which focuses on solving a problem or providing a benefit; symbolic positioning, which enhances self-image or belongingness needs; and experiential positioning, which connects emotionally with customers.
Can you explain the concept of a market map and its use in positioning?
-A market map is a visual tool that shows the positioning of various products or brands in the market. It helps identify gaps or areas of competition, allowing companies to see where they can position their product uniquely to appeal to a specific customer segment.
What is the example given in the script to illustrate the effectiveness of the STP model?
-The script uses the example of two books on outsourcing, where 'The 4-Hour Workweek' was positioned uniquely using all three positioning factors (functional, symbolic, and experiential) and sold more copies than all other outsourcing books combined, demonstrating the power of the STP model.
What are some advantages of using the STP marketing model?
-Advantages include increasing sales by defining a precise target market, avoiding wasted marketing efforts by not advertising to the entire market, and identifying gaps in the market for new product opportunities.
What potential disadvantages are associated with using the STP model?
-Disadvantages may include increased costs due to producing multiple versions of products or services, creating different marketing campaigns for each segment, and the need for different distribution channels to reach various customer segments.

Outlines

00:00

📈 STP Marketing Model Overview

This paragraph introduces the STP marketing model, which stands for Segmentation, Targeting, and Positioning. It highlights the common mistake of targeting everyone as potential customers, which can dilute the marketing message and make it less effective. The STP model is presented as a framework to help businesses improve their marketing strategies by dividing the market into segments, selecting the most attractive segments, and positioning the product to appeal to those segments. The paragraph explains the importance of tailoring the marketing approach to specific customer groups rather than using a generic one-size-fits-all campaign. It also outlines the first step of the STP process, which is market segmentation, and discusses various criteria for segmenting such as demographic, geographic, psychographic, and behavioral factors.

05:01

📘 Applying STP to Maximize Market Success

The second paragraph delves deeper into the STP model by discussing the targeting phase, where businesses evaluate the attractiveness of different market segments based on factors like size, growth potential, profitability, and ease of reach. It emphasizes the importance of not just focusing on the size of the segment but also its overall profitability. The final step, positioning, is explained as mapping out the product's unique place in the market relative to competitors, creating a value proposition that can be communicated to customers. The paragraph also explores three positioning strategies: functional, symbolic, and experiential, and suggests combining these to achieve a competitive advantage. An example of the '4-Hour Workweek' book is used to illustrate the effectiveness of STP, showing how it was uniquely positioned in the market to appeal to a specific audience. The paragraph concludes by discussing the advantages and disadvantages of the STP model, including increased sales, market efficiency, and potential increased costs due to tailored marketing efforts.

Mindmap

Keywords

💡STP Marketing Model

The STP Marketing Model stands for Segmentation, Targeting, and Positioning. It is a strategic framework used by marketers to identify, understand, and reach specific groups of potential customers. In the video, it is presented as a way to avoid the mistake of trying to appeal to everyone, which can dilute a product's appeal. The model is central to the video's theme, illustrating how to effectively tailor marketing strategies to specific customer segments.

💡Segmentation

Segmentation is the process of dividing a market into distinct groups of consumers with similar needs or characteristics. It is the first step in the STP model. The video explains that segmentation can be based on demographics, geography, psychographics, or behavior, and it's crucial for creating targeted marketing campaigns that resonate with specific customer groups.

💡Targeting

Targeting refers to the selection of the most attractive segments from the market segmentation process. It involves evaluating the potential of each segment based on factors like size, growth, profitability, and accessibility. The video emphasizes targeting as a critical step to focus marketing efforts on the most promising segments, ensuring resources are allocated effectively.

💡Positioning

Positioning is about creating a unique image or identity for a product in the minds of the target consumers. It is the final step of the STP model. The video describes how positioning can be achieved through functional, symbolic, or experiential means, and it highlights the importance of a product's unique value proposition in the marketplace.

💡Demographic Segmentation

Demographic Segmentation involves dividing the market based on characteristics such as age, gender, income level, education, and marital status. The video uses this concept to explain how understanding the 'who' of potential customers can inform marketing strategies, making them more personalized and effective.

💡Geographic Segmentation

Geographic Segmentation is the process of sorting the market by location, such as country, region, state, or urban areas. The video script mentions this as one of the criteria for market segmentation, suggesting that where customers live can influence the way products are marketed to them.

💡Psychographic Segmentation

Psychographic Segmentation groups consumers based on lifestyle, hobbies, activities, opinions, and personality traits. The video script explains that this type of segmentation helps to understand the 'why' behind customer purchasing decisions, offering deeper insights into customer motivations.

💡Behavioral Segmentation

Behavioral Segmentation classifies consumers based on their actions or behaviors related to a product, such as usage levels or brand loyalty. The video script uses this concept to illustrate how marketers can target customers based on how they interact with products, leading to more behaviorally tailored marketing campaigns.

💡Value Proposition

A value proposition is a promise of value to be delivered through a product or service. It differentiates the offering from competitors and communicates the unique benefit to the customer. The video script discusses how the value proposition is integral to positioning a product in the market and creating a competitive advantage.

💡Market Map

A market map is a visual representation that shows the relative market positions of competitors and potential gaps in the market. The video script uses the example of a car market map to demonstrate how companies can identify areas of opportunity and position their products strategically.

💡The 4-Hour Workweek

The 4-Hour Workweek is an example used in the video to illustrate the successful application of the STP model. The book was uniquely positioned in the market by targeting a specific audience (small business owners) and appealing to their desire for more free time, showcasing the power of segmentation, targeting, and positioning in action.

Highlights

STP marketing model is introduced to avoid the mistake of targeting everyone as a customer.

Coca-Cola, despite its global reach, offers different products to suit various consumer types.

STP stands for Segmenting, Targeting, and Positioning, a framework to improve marketing effectiveness.

Market segmentation involves dividing the market into groups based on demographic, geographic, psychographic, and behavioral criteria.

Demographic segmentation includes age, gender, income, education, marital status, etc.

Geographic segmentation sorts the market by location such as country, region, or urban area.

Psychographic segmentation classifies people by lifestyle, hobbies, opinions, and personality traits.

Behavioral segmentation is based on how consumers use the product, including purchase financing and brand loyalty.

Targeting involves selecting the most attractive segments based on size, growth potential, profitability, and ease of reach.

Positioning is about creating a unique market position for a product through a value proposition.

Three standard ways to position a product are functional, symbolic, and experiential positioning.

Functional positioning focuses on solving problems or providing benefits.

Symbolic positioning enhances self-image, ego, or belongingness needs, exemplified by luxury car marketing.

Experiential positioning connects emotionally with customers through elements of the product or brand.

A market map or positioning map helps visualize a product's position relative to competitors.

The book '4-Hour Workweek' is used as an example of successful STP application, targeting small business owners.

Advantages of the STP model include increased sales, precise targeting, and identifying market gaps.

Disadvantages include increased costs for multiple product versions, marketing campaigns, and distribution channels.

The STP model is a three-step process to tailor marketing and products to the needs of the most profitable customers.