What Is STP Marketing And How To Use It To Your Advantage?

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When used correctly, STP marketing can be a powerful tool for many businesses. With so many brands being hyper-focused on customers and prioritizing personalization, it is only natural to use an approach like that.

Hence, here’s everything you need to know about STP marketing and how you can use it to your advantage.

What is STP marketing?

STP marketing stands for Segmentation-Targeting-Positioning marketing which uses a three-step model that breaks down the process of marketing into distinct stages. The model is particularly useful for its ability to analyze and improve the way you communicate with your audience. 

What Is STP Marketing And How To Use It To Your Advantage

In other words, STP marketing focuses on the way you present the benefits of your products or services to the different segments of your target audience. The basic breakdown of STP marketing includes:

  • Segmentation: At the first stage, you divide your target audience or market into different segments through the process of segmentation.
  • Targeting: At the second stage, you identify the segments that you will be focusing on or targeting.
  • Positioning: At the third stage, you position your product or service and create a marketing strategy that will help you reach your target audience segments.

The main reason why STP marketing is so effective is that it largely relies on segmentation. When you don’t treat your audience as a monolith, it is much easier to find the right approach to your customers based on their preferences, interests, etc. You don’t aim to appeal to everyone at once which makes it easier to actually connect with the people you are targeting. 

You need to personalize your marketing to create unique shopping experiences. Instead of focusing on your products or services, you focus on your customers.

Compared to traditional marketing models, STP marketing is hyper-personalized at its core. This means that your collective efforts become more effective as a result of a variety of factors. The messages you send to your audience are more personal and allow you to connect with your audience on an emotional level. The customer personas you create for different segments enable you to find the best approach to every different customer you target.

At the same time, this personalization in the way you approach marketing makes your efforts more efficient and effective. You no longer have to rely on marketing channels that may not be fitting for your goals. You no longer have to take big risks and expect low returns. There will still be challenging situations, but it will still be much easier to make your marketing campaigns more successful overall.

When using STP marketing, many businesses adopt the so-called STEP formula. According to the formula, segmentation is added to targeting which equals positioning. In practice, this means that by combining segmentation and targeting, you eventually arrive at a certain kind of positioning which enables you to create specific marketing strategies for the different segments of your target audience.

What are some examples of STP marketing?

Perhaps the most well-known example of STP marketing is that of the Cola Wars of the 1980s. As the name suggests, the Cola Wars happened between the two biggest companies making coke – Coca-Cola and Pepsi. At the time, Pepsi was trying to expand into the market and establish itself while Coca-Cola was dominating the niche. To achieve its goals, Pepsi decided to target very specific segments of its audience.

examples of STP marketing

Instead of trying to appeal to everyone at once, they took the STP marketing approach. Pepsi used the attitude and loyalty factors to divide the target audience into three different groups (or segments):

  • Consumers that view Coke positively and have 100% loyalty to the Coke brand.
  • Consumers that view Pepsi positively and have 100% loyalty to the Pepsi brand.
  • Consumers that view both brands positively, are loyal to both, and purchase from both.

The Cola Wars happened in the third segment as the other two were already quite clearly defined. Everything changed in 1985 when Coca-Cola launched New Coke. New Coke was promoted as a new formula of the old drink which meant that some old customers weren’t particularly fond of it. This gave Pepsi an opportunity to make some of the consumers from the first segment their own customers.

Noticing how some of Coca-Cola’s customers were frustrated with the change, Pepsi decided to start targeting the first segment instead of only focusing on the third one. They started creating promotional content that directly addressed Coca-Cola’s loyal customers. For example, a Pepsi commercial at the time featured a teenage girl discussing a breakup to show her feelings about the change in Coca-Cola’s classic taste. Another ad showed an older generation that was also angry that the taste they were used to was different now.

The new marketing strategy adopted by Pepsi worked, and even though Coca-Cola relaunched its classic product, it still lost its position as the dominant player on the market. Pepsi was able to acquire new customers who were once only loyal to Coca-Cola. 

In retrospect, this is an amazing example of STP marketing in action. Every stage (segmentation, targeting, positioning) is clearly defined and there is a completely new marketing strategy that the company adopted.

On a smaller scale, you can also look at the contemporary example of freelancers. Many freelancers such as content writers are able to create different types of content, but to find clients, they often choose to specialize in a particular niche. 

Check a custom writing reviews site like Rated by Students to see how freelance writers position themselves to appeal to a particular segment of clients interested in finding a writer who specializes in a specific area. You can check the writers’ experience, expertise, education, and so on.

So, how do you proceed with STP marketing? There are three main stages that you will have to go through:

#1 Segmentation

The first stage of STP marketing is segmentation. At this stage, you need to research and analyze your target audience to understand who your potential customers are. Then, you need to divide this audience into groups known as segments. 

Segmentation

You can make the division based on a variety of factors depending on which characteristics of your audience matter to you more. In most cases, you can use one of the four main types of segmentation:

  • Geographic: For geographic segmentation, you will be relying on the customers’ locations. You can perform the segmentation in a more general sense by looking at continents or you can take it to a more nuanced level and use country, region/state/province, city, etc. information.
  • Demographic: Another type of segmentation you can use is demographic segmentation. Here, you will need to work with more variables, including the gender, age, education level, occupation, etc. of your customers. Demographic segmentation can give you more specific segments than geographic segmentation because it requires you to look at more characteristics.
  • Behavioral: Behavioral segmentation is all about the way your customers behave when interacting with your business. Information like the products they favor, how frequently they purchase from you, which categories they browse, and so on can all be used for this type of segmentation.
  • Psychographic: Lastly, you can use psychographic segmentation which looks at the personality of your customers. You will need to consider customer characteristics such as hobbies, opinions, beliefs, favorite activities, and the specific lifestyles your customers lead among other things.

Any of these types of segmentation will help you divide your target audience into segments. However, which type will work the best for you will depend on your specific goals as well as the customer data you already possess. 

For example, if you don’t know much about your audience’s beliefs and interests, you won’t be able to perform psychographic segmentation effectively. In this case, it’s better to stick with a different type of segmentation.

#2 Targeting

The second stage in STP marketing is targeting. Once you have effectively segmented your target audience, you will need to determine which of these segments fit your marketing goals the best. In other words, targeting which segments will give you the best results (i.e. the highest return on investment). 

Targeting

In most cases, it is a good practice to measure results by the number of conversions you get, but it’s up to you to decide what kind of conversions you are aiming for (e.g. product sales vs email signups vs social media follows).

Just as with segmentation, there are certain factors you can consider when choosing the segments to work with. The three most important things to consider are:

  • The Size of the Segments: How big is each segment you have created? Are your segments actively growing in size, are they stagnant, or are they decreasing in size? What is each segment’s future growth potential?
  • The Profitability of the Segments: Do your segments have high profitability? Which segments are willing to spend the most amount of money on your products or services? What are the respective lifetime values of your customers in each segment?
  • The Reachability of the Segments: Which segments have a low cost of acquisition (CAC)? How easy is it to reach each segment? Which marketing methods will you have to use to reach them?

By considering these factors, it will be much easier for you to determine which segments will be the most fitting for you to target with your marketing. The segments you choose need to fit your needs, goals, and resources among other things, so the targeting stage is particularly important for the success of your marketing strategy.

If you need help choosing segments, you can find a researcher or an experienced writer in your field who will help you perform the targeting. You can check some websites that write papers for you to find a professional like that and then work with them closely to identify the most appropriate segments for your future marketing campaigns.

#3 Positioning

The last and final stage of STP marketing is positioning. Now that you have selected the segments you will be working with, you will need to directly address your audience to distinguish your products and services from the ones offered by your competitors. 

Positioning

To put it simply, you need to stand out from the crowd by finding some unique aspect of your brand or what you have to offer that is different from everything else on the market.

In most cases, it will be relatively easy to perform the positioning because all the characteristics and factors related to your audience that you have been working with so far should already give you an idea of what your niche is. To go even further than that, you can consider three different types of positioning to help you in the process:

  • Symbolic: When using symbolic positioning, your goal is to enhance the way your customers view themselves as well as their sense of being a part of a particular community. Luxury brands are usually very successful at this – even if the product has the same functions as its less luxurious equivalents, it still has the element of boosting your customers’ ego.
  • Functional: As the name suggests, this kind of positioning directly addresses the problems and pain points your customers have to provide them with the right solutions to these problems. With functional positioning, you need to focus on the advantages of your products or services above all else.
  • Experiential: Lastly, there is experiential positioning which largely relies on building a loyal customer base. In this case, you need to aim to establish an emotional connection with your customers so that they feel connected to your brand or to the products or services you offer.

While you can choose one of the three types of positioning, the best thing to do is to combine them all and use each one to an extent. Think about what is important to your customers.

Then think about how your competitors satisfy such needs compared to how you can do that. Use the three types of positioning above to create the marketing strategy that will set you apart from everyone else 

Conclusion

To summarize, STP marketing is definitely a technique you can benefit from a lot. Not only is it in line with the current tendency of brands prioritizing customers above all else, but it is also a very powerful approach for your long-term marketing strategy

Use this guide to help you get started and begin targeting your customers more successfully.

About the author 

Frank Hamilton

Frank Hamilton is a blogger and translator from Manchester. He is a professional writing expert in such topics as blogging, digital marketing and self-education. He also loves traveling and speaks Spanish, French, German and English. Meet him on Facebook and Twitter.

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