STP Model for Effective Marketing

What is STP Model?

STP model stands for Segmentation, Targeting, and Positioning. It is a marketing model that helps businesses identify their ideal customer segments, choose the right target market, and create a unique value proposition that sets them apart from the competition.

What is the importance of the STP Model for Marketing?

STP helps businesses maximize their return on investment by ensuring that their marketing efforts are focused on the right customers and communicated in a way that resonates with them. This can lead to higher conversion rates, increased customer loyalty, and overall business growth.

Overview of the Three Steps of the STP Model

  1. Segmentation: Dividing the market into smaller groups of customers with similar needs and characteristics.
  2. Targeting: Selecting the most promising customer segments to focus on.
  3. Positioning: Creating a unique value proposition for the chosen target market, positioning the business as the best solution for their needs.

What is the purpose of the STP Model?

The STP model helps businesses understand their customers better, develop more effective marketing strategies, and ultimately increase their profitability. By using the model, businesses can ensure that they are targeting the right customers, communicating the right message, and delivering the right products or services to meet their needs.


Market segmentation refers to the process of dividing a market into smaller groups of consumers with similar needs or characteristics. This enables marketers to create targeted and personalized marketing strategies that resonate with specific groups of consumers.


Types of Market Segmentation

  • Demographic Segmentation
  • Geographic Segmentation
  • Psychographic Segmentation
  • Behavioral Segmentation

How to Choose Segments for your Marketing Strategy

  • Identify customer needs and characteristics
  • Analyze data from customer surveys, sales, and other sources
  • Evaluate the size, growth, and profitability of each segment

Importance of Market Segmentation for Targeting and Positioning

Market segmentation is crucial for the success of the targeting and positioning steps of the STP model. By segmenting the market, businesses can tailor their marketing strategies to the specific needs and preferences of their target customers, leading to higher conversions and improved ROI.


Targeting in marketing refers to the process of identifying and choosing specific market segments to focus on, with the aim of attracting and retaining those customers through tailored products, services, and marketing messages.

Benefits of Targeting for Marketing

  • Helps companies focus on the most profitable customers
  • Improves efficiency and effectiveness of marketing efforts
  • Increases customer loyalty and satisfaction
  • Provides a better return on investment for marketing spend.

How to Identify and Evaluate Target Market Segments

  1. Conduct market research to understand customer demographics, behavior, and needs.
  2. Analyze market segmentation data to identify potential target segments.
  3. Evaluate each target segment using criteria such as size, growth potential, profitability, and level of competition.
  4. Select the target segments with the highest potential for success.

Approaches to Targeting

  • Single-Segment Concentration: Focusing on a single target segment and offering specialized products and services to meet their needs.
  • Selective Specialization: Selecting multiple target segments and offering specialized products and services for each.
  • Market Coverage: Offering a broad range of products and services to cover a wide range of target segments.


Positioning refers to the process of creating a unique and differentiated image for a brand in the minds of the target audience. It involves crafting a specific value proposition and messaging that sets a brand apart from its competitors and appeals to its target market.

Importance of Positioning in Marketing

Positioning is crucial for marketing success because it helps to:

  • Clarify the unique value a brand offers to its target audience
  • Establish the brand as a leader in its category
  • Differentiate the brand from its competitors
  • Attract and retain customers

Steps to Develop a Positioning Strategy

  1. Conduct Market Research: Gather information about your target market, competitors, and industry trends to inform your positioning strategy.
  2. Define Your Unique Value Proposition: Identify the key benefits and differentiators that set your brand apart from the competition.
  3. Develop Messaging: Create messaging that clearly communicates your unique value proposition and differentiators.
  4. Evaluate Competitors: Analyze your competitors’ positioning strategies to understand how your brand can differentiate itself.
  5. Implement the Strategy: Integrate your positioning strategy into all aspects of your marketing, including product design, advertising, and communication.

Examples of Effective Positioning Strategies

  • Luxury positioning: Establishing a brand as a premium, high-end offering for customers willing to pay a premium for quality and luxury.
  • Budget positioning: Creating a brand that is affordable and accessible for cost-conscious customers.
  • Quality positioning: Focusing on delivering exceptional quality and value to customers.
  • Innovation positioning: Establishing a brand as a leader in product innovation and technology.

Integrating STP into Marketing Mix

The role of Product, Price, Promotion, and Place in STP Model

  • Understanding the relationship between the 4 Ps and STP
  • How to align product, price, promotion, and place strategies with the chosen target market and positioning

How to Balance Segmentation, Targeting, and Positioning with the Marketing Mix

  • The importance of considering STP when making decisions about the marketing mix
  • How to ensure that the marketing mix effectively supports the chosen segmentation, targeting, and positioning strategies.

Examples of STP integration

Through its effective use of the STP model, British Telecom (BT) has been able to successfully cater to its diverse customer base.

From individuals to enterprise-wide organizations, BT has tailored its services to meet the specific needs of each segment, ensuring its customers receive the best possible experience.

BT’s innovative approach to serving not just its customers, but its competitors as well, further demonstrates its commitment to providing top-notch services to all

The Bottom Line

What are the Key Takeaways?

  • STP Model stands for Segmentation, Targeting, and Positioning, which is a crucial approach for effective marketing
  • Market Segmentation involves dividing a large market into smaller groups of customers with similar needs or characteristics
  • Targeting involves identifying and evaluating target market segments to focus marketing efforts and resources on
  • Positioning is the process of creating a unique image or perception of a brand or product in the mind of the customer
  • Integrating STP into the Marketing Mix involves considering the role of product, price, promotion, and place in the overall marketing strategy

Importance of STP Model for Effective Marketing

  • STP Model helps businesses to effectively allocate resources, improve customer satisfaction, and increase profitability
  • By using STP, businesses can better understand their target customers and create a marketing mix that appeals to them
  • STP Model helps businesses to differentiate themselves from competitors and establish a unique identity in the market

Final Thoughts on the STP Model and its Relevance in Today’s Market

  • The STP Model remains a relevant and valuable approach for marketing in today’s dynamic and competitive market environment
  • While the underlying principles of the STP Model have remained unchanged, new technologies and data analytics have made it easier for businesses to gather and analyze customer data for market segmentation and targeting purposes
  • The STP Model will continue to play a critical role in helping businesses to achieve their marketing goals and succeed in today’s market.



Marty Hoffman

Marty Hoffman, MBA, PhD Management Consultant for Fortune 500 and Corporate Strategist 📍 San Francisco, CA More »

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