STP Marketing (Segmentation, Targeting, Positioning)

Summary

Today'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.