Segmentation, Targeting, and Positioning (STP) Model of Marketing

What is the STP Model of Marketing?

STP model of marketing is a marketing strategy that helps the business firm to know to whom they are promoting their goods and for what reason through segmentation, targeting, and positioning.

STP is an acronym of segmentation, targeting, and positioning – which includes first dividing a whole market into many reachable segments, identifying & selecting the best market segment from many segments, and employing marketing strategies to the selected market segment to create an image of the product and company in the market.

STP marketing aims at transforming product-focused marketing into customer-focused marketing. As such, in this marketing, customers’ need, want, desire, habits, styles, and other purchasing decision-making factors are taken as a priority.

Since, keen competition in the market, if any firm makes marketing efforts to reach target customers, make sales, and profit, without the STP model such firms only remain at generic, STP model is what takes marketing efforts of the company to the next level.

STP marketing believes that customers should be a priority, the products should be produced, offered, & delivered as per the needs of customers, ultimately satisfying them to create prodcut position in their mind and uplifting sales and profits.

Now lets, understand each element of the STP marketing model in detail and later how to successfully create one and do it.

Segmentation, Targeting, and Positioning (STP)

Market segmentation, market targeting, and prodcut positioning are the three elements that make the STP model in marketing complete.


The first component of STP marketing is market segmentation. Market segmentation is when a whole market is divided into its different segments to make each segment more understandable and approachable.

In every market, the customers are different in terms of needs, desires, age, gender, income level, consumption habit, and so on. Hence, a single marketing strategy will not be effective.

If the marketer wants to promote high-priced products, he may have to go for searching customers who have high-income levels and spending habits. If he wants to promote his products related to beauty, he should go searching especially for girls, and so on.

Market segmentation to be effective requires to have these five qualities,

  • Differences in Customer’s Response – Each segment of the market should have a different response to marketers’ offers. If two market segments have the same response to the marketer’s offer, they are no longer two segments, they are only one segment.
  • Measurable – For successful market segmentation, the responses of customers should be measurable. The measured responses are effective means for the marketer to take a further move to enhance or preset the next offer.
  • Accessibility – When a marketer segments market and targets one segment. The selected segment should be reachable means the distribution channels should be reachable to that area.
  • Large Size – Since market segmentation is time-consuming and expensive. If the market segment is small i.e. number of customer are fewer, the markter may not be able to recover his invested money and effort.
  • Stability – After the segmented market is selected, it should be stable for a certain period of time, if not the marketer or firm can not be able to recover its expenses.

In addition, to segment the market, the markter or firm can segment the market based on the four most popular factors. They are,

  • Demographic Segmentation – Through geographic segmentation, the marketer can segment the market based on gender, age, marital status, family, income, etc.
  • Geographic Segmentation – Under this, the market is segmented based on geographic areas. Its variable includes area, city, country, etc.
  • Psychographic Segmentation – Here, variables such as social class, lifestyle, personality are used to segment market,
  • Behavioral Segmentation – Here, people’s habits on purchasing decisions, for benefits they purchase, etc. are used.


The second important component of the STP marketing model is market targeting. Market targeting means selecting a target market (best market segment).

Before selecting a target market, the market is segmented, and based on a thorough analysis of all potentiality of segments, the most beneficial segment is selected.

In addition, in a target market selection process, the benefits plus the company’s strengths and objectives are also considered. The better the firm is able to know the potential target market by considering the firm’s strengths, objectives, and benefits, the better success will get the firm.

While setting the best target market, the firm or marketer has to focus on,

  • Size and Growth of Segment – For better market targeting, the market segment must be of the right size with better profit potentiality. And, there should also be the possibility of growing such market.
  • Structural Attractiveness – Structural attractiveness of the segment indicates that the segment should have characteristics of growth and provide long-term profit to the firm.
  • Company Objectives and Resources – While selecting the target segment, the company should have to identify, does the target segment meets company objectives, or the company has available resources to satisfy the segment?

In addition, the marketer can also use various target marketing strategies to select one.

  • Market Aggregation Strategy – It is the marketing of a prodcut to all types of customers.
  • Market Segregation Strategy – It involves dividing a whole market into segments, and marketing to the selected segment.
  • Concentrated Marketing – It involves marketing the product to a very specific type of customer.
  • Local Marketing – It refers marketing of a product to a local market or local area.
  • Individual Marketing – In such marketing, a markter individually visits his customers and makes offers.


The last (third) component of the STP model of marketing is product positioning. Product positioning refers to the firm attempt to create a unique image of its offerings in the mind of consumers.

Product positioning is a great way to build a brand image, trust which consumers perceive in a different way than competitors.

Since in the market, two or more competitors will be offering the same benefits to their customers. Here, product positioning focus on serving differently to the customers so that different image can be created as compared to competitors.

A marketer can create an image of his brand through either quality or design, service, price, package, etc. Through prodcut positioning, a firm will have benefits such as brand image, good customers satisfaction, competitive advantage, standing ahead of competitors, secure futures, etc.

For product positioning, a markter can use one or more of these positioning strategies,

  • Product’s specific feature positioning
  • Positioning in prodcut benefits
  • Positioning in a specific occasion
  • Positioning for use category
  • Positioning against another product
  • Positioning on product class dissociation

How To Make A STP Marketing Strategy?

How to do the STP model of marketing effectively? Generally, market segmentation, market targeting, and product positioning are the three-step of STP marketing.

In addition, by combining segmentation, targeting, and positioning a better STP marketing strategy can be created. The steps of the STP marketing process are,

Identify and Segments The Market

The first step in STP marketing is the identification of the market and segmenting it. In the first step, the marketer gets to know the potential market where profit opportunities are much higher than others.

While defining the market, the marketer can define the market in terms of the consumer market and industrial market. If the markter is selling consumer products he may have to identify consumer marketers. Similarly, if he is selling industrial products, he may go for identifying industrial customers.

After the identification of the market, the marketer divides the market into many segments by using the bases of geography, behavioral, psychographic, demographic variables.

Develop A Profile For Each Market Segment

The second step of STP marketing is developing a profile for each market segment which is segmented in the first step. In such a profile, a detailed explanation should be done on each of the segments.

The detailed explanation of each segment profile should be done in a way that ensures understanding and support to make a good marketing decision.

The profile should include customers’ characteristics such as need, taste, preference, gender, income level, spending habits, brand preferences, location, and other relevant characteristics.

Evaluate Each Market Segment

After the development of the profile, the marketer should evaluate each of the market segments by considering potential costs and benefits.

The evaluating factors may be the cost to reach the segment, profit from the segment, objective of the firm, resources of the firm, growth of the segment, attractiveness of the segment, etc.

Besides this, the marketer also segment attractiveness factors such as reachability, sustainability, identifiable, responsive, and profitable

Select The Target Market

The fourth step of the STP marketing process is the selection of the target market. The target market is the one that is the best for the firm.

The best target market is one that promises to deliver a good return to the firm, which meets the objectives of the firm & resources, which has the possibility to grow, and with the least effort delivers good returns.

Since the selection of the target market is the most significant and difficult task in the STP marketing process, the marketer should consider th segment’s growth rates, attractiveness, competition, cost, size, reachability, and overall strategy of the firm.

Develop Positioning Strategy

After the selection of the target market, the next task of the marketer in the STP marketing process is developing the product positioning strategy.

The positioning strategy should be in a way that best fits in the consumer’s mind. Other competitors may also be positioning the same product you want, so you have to set unique attributes and features on the product to promote uniquely.

You can set your positioning strategy based on product-specific quality, features, benefits, special occasion, price, category, etc.

Do Marketing Program

Once the product positioning strategy is developed, the product should be marketed to the targeted customers. In this step, the marketer has to develop marketing strategies to communicate his products. For this marketing mix is the best possible way.

The 7Ps of marketing is the most imperative tool for effective marketing. As such the prodcut price should be acceptable, the product should have satisfaction quality, distribution should be done at the right place, the right promotion tools should be used, skilled people should be employed, the process should be effective, and physical evidence should also be attractive.

Monitor The Position

STP marketing is not a single time effort, the firm has to regularly monitor the performance. Once the product is marketed and promoted to create the desire of the consumers, it can not be said that it always works.

Due to the unusual competition ins the market, day by day substitute products are produced. As such customers may be directed towards competitor products.

Thus, to maintain position in the market, the marketer has to monitor the performance of positioning strategy, and if it asks to change, he has to change it on time. In addition, he may offer new skims to customers and other attractive offers to maintain product position in the market.

Why STP Marketing Is Important?

The ultimate objective of the STP Model of marketing is to build a long-lasting product’s position in the market. It begins with the identification of customers, segmenting markets, selecting target markets, building positioning strategy, and ultimately creating a unique image.

Due to keen competition, once a marketing strategy is successful, it can not be said that in the future, the same strategy will be successful. The marketing strategies are needed to be changed and updated with time and situation. STP marketing exactly ensures this.

These days, the STP model is an inevitable marketing part of any business firm and its craze and potentiality are also growing. And, STP’s importance can not be explained in one sentence.

2 thoughts on “Segmentation, Targeting, and Positioning (STP) Model of Marketing”

Leave a Comment