STP Marketing (Segmentation, Targeting, Positioning)
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
- 𧩠The STP marketing model stands for Segmentation, Targeting, and Positioning, which is a framework to improve marketing effectiveness.
- π« Companies often make the mistake of trying to target everyone as their customer, which can dilute the appeal of their product or service.
- π Even global brands like Coca-Cola offer different products to cater to various customer segments, highlighting the importance of market segmentation.
- π Segmentation involves dividing the market into groups based on criteria such as demographics, geography, psychographics, and behavior.
- π― Targeting is about identifying the most attractive segments based on factors like size, growth potential, profitability, and ease of reach.
- π Positioning is about creating a unique value proposition in the market that differentiates your product from competitors in the eyes of customers.
- π There are three common ways to position a product: functional, symbolic, and experiential, each appealing to different customer needs.
- π A market map or positioning map can visually represent how products are positioned relative to each other, revealing potential gaps in the market.
- π 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.
- π Advantages of the STP model include increased sales, cost efficiency, and the ability to identify market gaps.
- π° Disadvantages include increased costs for producing multiple versions of products or services and the need for different marketing campaigns for each segment.
- π 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
π 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.
π 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
π‘STP Marketing Model
π‘Segmentation
π‘Targeting
π‘Positioning
π‘Demographic Segmentation
π‘Geographic Segmentation
π‘Psychographic Segmentation
π‘Behavioral Segmentation
π‘Value Proposition
π‘Market Map
π‘The 4-Hour Workweek
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.
Transcripts
hello and welcome to today's lesson
where we're looking at the STP marketing
model now a mistake many companies make
is to think that anyone can be their
customer taking this approach can make
it difficult to sell your product or
service because none of your prospective
customers will feel that your solution
is tailored to them and their specific
needs in fact there isn't really a
product in existence that should target
everybody as its customer even a company
like coca-cola that operates in over 200
countries and sells well over a billion
products a day offers different products
to suit different types of people now
STP stands for segmenting targeting and
positioning and it's a simple framework
that can help improve your marketing and
what the model says is that to achieve
easier sales you should divide your
market into groups of customers called
segments select the most attractive
segment or most attractive segments and
then position your product in the
marketplace to be the most appealing to
that segment let's take a closer look so
the first step of the STP process is to
segment your market and here you divide
your market into groups based on some
criteria and there's a number of
criteria you can use so first we have a
demographic segmentation and that's
where you divide your market based on a
combination maybe age gender income
level education level marital status etc
you can divide your market based on
geography so sorting your market by
country region state or province or even
urban or city area you can segment your
market in a psychographic way so
segmenting people by lifestyle hobbies
activities opinions political
affiliation entertainment choices or
maybe personality traits or attitudes
now while demographic information
explains who your potential customer is
psychographic information tends to
explain why they choose to buy another
way to segmented people is behaviorally
and this breaks down your market by how
they use the product so including how
the purchase was financed brand loyalty
their usage levels key benefits
sort or key features used etc now when
you divide your market into segments and
then focus your marketing on a specific
segment driven by the information you've
collected you're much more likely to be
successful than if you simply created a
one-size-fits-all generic marketing
campaign so the second step is targeting
and this involves deciding which of the
segment's you've identified are the most
attractive so essentially you're trying
to determine the commercial
attractiveness of each segment and
there's a number of factors you can
consider to do this so for example size
of the segment and its potential to grow
in size in the future profitability of
the segment what segments are prepared
to pay the most for your product or
service or what's going to be the
lifetime value of a customer in this
segment and finally we have ease of
reach you know how difficult is it for
you to reach the market with your
marketing can your distribution networks
easily reach this segment is it going to
be really expensive to try and acquire a
customer so ultimately it isn't just the
size of the segment you should be
looking at but it's the overall
profitability of each segment so the
final step is positioning and here you
map out the different variables
considered in the previous two steps and
position your product differently to
your competitors in the minds of your
customers you want your product or
service to take a unique position in the
market and in marketing terms this is
called your value proposition now there
are three standard ways you can position
your product to achieve a competitive
advantage so first you have functional
positioning and this refers to solving a
problem or providing a benefit to your
customer second you have a symbolic
positioning and this refers to enhancing
the self-image ego or belongingness
needs of your customer
so think about luxury cars they market
themselves using symbolic positioning so
if luxury car will get you from A to B
just like any other car but unlike other
cars they fulfill their customers
self-esteem and ego needs and the third
way of positioning is experiential
positioning and this riff
to focusing on those elements of your
product or brand that connect
emotionally with your customers now
ideally you want your product or brands
to combine all three positioning factors
to put it as a competitive advantage to
your competitors now one way of drawing
your position in the market showing
what's important in the mind of your
customer is to put together a market map
or a market positioning map such as the
one you can see here for the car market
now this diagram is obviously just a
simple example it doesn't show all car
manufacturers but what it does allow us
to see is that there is perhaps a gap in
the market for an economic performance
car as there's no other company
competing in this space right now so
let's look at a little example both of
the books you see here are essentially
about outsourcing however the book on
the right sold more copies than all
other outsourcing books combined why do
you think that is well to understand the
real power of the STP model we can use
it to see why the 4-hour workweek was so
successful firstly let's look at
segmenting targeting and positioning for
the book on the left now this book is
aimed at everyone
it hasn't segmented the market and then
targeted a specific segment and because
it isn't targeting a segment then it
can't be uniquely positioned it's trying
to be all things to all people
interested in outsourcing now conversely
before our workweek has clearly
segmented the market and decided to
target small business owners and people
wanting to start a business it then
appealed directly to that market using
all three positioning factors and you
can see all of these on the cover
functional the book gives us a process
we can use to escape the nine-to-five
symbolic it's fulfilling our ego needs
by telling us we can join the new rich
and experiential the picture of a
business owner in a hammock is
deliberate and it connects with us
emotionally
what busines business owner doesn't want
more free
time so this example shows you the real
power of the STP model enabling you to
create a unique product in the minds of
your customers so that you can dominate
your chosen segment before our work week
is essentially a book about outsourcing
but positioned in a very unique way so I
really hope this example shows you the
real power of the model now there are a
number of advantages and disadvantages
associated with the model so firstly in
terms of advantages it allows you to
increase sales by defining a precise
target market and then positioning
products directly at that market it
helps you avoid wasting money by
advertising to the whole market and it
helps you identify gaps in the market
now there are also a few disadvantages
associated with the model so costs can
increase if you have to produce multiple
versions of your product or service you
will need to create different marketing
campaigns and collateral for each
segment you target and again that can
increase your costs and finally you may
need to use different distribution
channels to reach different customer
segments so in summary the SCP marketing
model is a three-step process designed
to help you identify your most
profitable customers and then tailor
your marketing and products to the needs
of those customers and the three steps
of the model are segments so divide your
market into segments target identify the
most attractive segments to your
organization and finally position or
positioning position your product or
service to appeal directly to the
audience you want to target so that's it
from for this lesson I really hope you
enjoyed it and I look forward to
speaking to you again soon
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