How to Use STP Analysis in Your Business


Are you looking for ways to stay ahead of the competition in your business? We have the answer! Introducing STP Analysis – a powerful and effective tool that can help you maximize your profits and grow your company. Read on to learn how this simple strategy can be used to bolster your business!

Introduction to STP Analysis

STP stands for segmentation, targeting and positioning, which are the three essential components of a successful marketing strategy. By dividing a market into different segments, a business can identify potential opportunities to position its products or services to appeal to distinct groups of customers. This approach is sometimes referred to as market segmentation.

Market segmentation is the process of analyzing an entire market in order to identify distinct subgroups or segments that possess similar characteristics and needs. As each segment differs in its needs and wants, it should be targeted with tailored messaging and an optimized offering. The goal of this tactic is for businesses to create successful marketing campaigns by providing customers with individualized experiences that will drive engagement and sales.

Positioning refers to the actions taken by businesses in order to place their products or services above those of competitors in their target market. It involves tailoring products or services based on a customer’s preferences so that they become more attractive than competing products from other brands in the same space. Positioning requires careful analysis of the competitive landscape and constant iteration based on customer feedback in order for it to be effective.

By combining these three core concepts (segmentation, targeting and positioning) into a single holistic strategy, businesses can gain valuable insights into their target markets that inform decision-making processes across product development, marketing campaigns and customer experience initiatives. This approach helps them gain competitive advantage over their rivals while creating unique value propositions tailored specifically towards target audience segments.

Advantages of STP Analysis

STP (Segmentation, Targeting, and Positioning) is an effective marketing strategy in which a business divides a larger market into smaller segments based on shared characteristics, identifies target audiences in each of those segments, and then creates effective positioning strategies to make the business stand out among the competitors.

By using this approach, businesses can make more effective use of their resources as well as identify potential opportunities for growth and expansion. Here are some of the main advantages of using STP Analysis:

  1. Market segmentation: It allows you to gain a more thorough understanding of your target market by identifying subgroups within it and analyzing their habits, preferences, needs and desires. This can help you determine the most profitable markets for your products or services.
  2. Target Audience Identification: Using STP Analysis can help you identify the most relevant target audience for your products or services, enabling you to tailor your messaging and product offerings to meet those specific needs more effectively.
  3. Effective Positions: Once you have identified your target audiences, customers can get an idea of how they should position their brand in relation to their competitors, helping them increase brand recognition and loyalty across different segments of the market.
  4. Reduced Costs: By targeting specific customer groups instead of trying to appeal to everyone at once businesses can increase their efficiency by investing in areas that yield better results than spending money on campaigns that are ineffective with their target audience and could end up being costly failures due to lack of relevance or understanding of customer needs.

Steps of STP Analysis

STP, or Segmentation, Targeting and Positioning, is an important part of any marketing strategy. By dividing your market into segments, you are able to create a more intelligent and effective marketing mix that reaches specific customer needs. Here’s how to do it:

  1. Identify Your Market Segments: Evaluate user characteristics and provide data-driven insights into who your target customers are and how they behave. Different members of a household may have distinct needs, depending on their gender, lifestyle needs and interests. Identify target segments within each household with the help of customer surveys, focus groups and research methods.
  2. Develop an Appropriate Offer: Create custom marketing offers based on the identified market segment’s purchase patterns, psychographics (lifestyles), behavior patterns (usage frequency) and preferences (brand usage). Think of features in your product/service that could make it attractive for different customer types—such as safety features for family owners or customizable options for individual buyers for instance.
  3. Select Relevant Communications Channels: Based on consumers’ media preferences, pick the appropriate communication channels to deliver your offers—which could be anything from email campaigns to outdoor billboards! Make sure your message resonates with the targeted segment’s transportation habits (people living in rural areas may not be used to taking public transport) or payment expectations (phone plans might be frustratingly expensive).
  4. Determine Your Positioning Strategy: How will you differentiate yourself from other business vying for the same market? What unique benefits can you offer? It could range from better customer service or an easier payment system — whatever it is, make sure it stands out from the competition! You should also pay attention to what potential customers think about competitors relative to yours—check customer feedback forums online!

Segmentation of Market

Segmentation is the process of dividing a market into distinct meaningful groups of buyers based on their needs, characteristics, or behaviors. It allows you to identify distinct customer segments and target them with precise marketing tactics that meet their specific needs.

In today’s business environment, segmentation is a critical part of the marketing mix – having a clear understanding of who your target customers are and what they anticipate will help you craft messaging and product offerings that are optimized for those individual segments. Segmentation can help you:

  • Refine your message to appeal to each segment’s specific desires
  • Develop targeted messaging based on customer insights
  • Focus promotions on certain segments in order to cut through marketing clutter
  • Identify potential niche markets
  • Increase channel effectiveness with tailored messages
  • Tailor products or services in order to maximize demand
  • Understand buying motivations and behaviors within each segment

The most common ways to segment markets include: demographic variables (e.g. age, gender), psychographic factors (e.g. lifestyle behaviors, values), geographic factors (e.g. continent, state), and buying behavior (e.g. frequency of purchase). Using your current customer data as well as industry trends and reports can help you find meaningful granularities when crafting your market segments for targeting purposes.

Targeting Market Segments

When it comes to marketing, target customer selection and segmentation is key. To determine which market segments and customer groups to focus on, businesses use a tool called the STP process. This process stands for Segmentation, Targeting and Positioning. By focusing on these three areas, companies are better able to identify their target markets, allocate resources effectively and build strong relationships with their customers.

Segmentation: The first step in the STP process is to segment your market; that is, breaking down your potential customer base into smaller groups based on shared characteristics such as age, geographic location, job title or gender.

Targeting: After dividing up your customer base into specific segments that you feel most strongly about targeting for marketing purposes with respect to both short-term and long-term objectives in mind. It’s important to understand not only what you want from your customers but also what they can bring to the table.

Positioning: After identifying your target markets and building a clear understanding of their needs it’s time to define a position statement expressing the idea by which you would like those customers to remember or think of when they think of your particular product or service – this is often referred to as “positioning”. This process usually involves creating creative campaigns that best position the product or service within each identified target market segment.

Positioning Your Product

Positioning your product is the process of finding a competitive advantage against rival products and services. A key part of this process is understanding the different elements of STP Analysis (Segmentation, Targeting and Positioning).

Segmentation involves grouping customers into distinct segments based on market characteristics such as geographic location, behavior, attitude, lifestyle or income. You can then assess the needs of each segment in order to identify which segment you want to target.

Targeting involves selecting which segments you want to focus on by considering factors such as size of the segment, growth rate, competitive intensity and profitability. You should also consider how well you can serve those customers with your current resources.

Finally, after you have chosen the segments that are most attractive for their potential returns, you need to craft your position in order to dominate within those segments. This involves:

  • Creating messaging that differentiates your product from rival products.
  • Honing how you communicate with potential customers through promotions and marketing strategies.

Implementing STP Analysis

The next step after understanding and analyzing the STP factors is implementation. Implementing STP analysis means taking the pertinent information and applying it to your business in a practical way. This involves carefully crafting and articulating the value of your product or service based on the preferences of each individual segment, and then channeling those messages appropriately.

Consider how you can use marketing channels such as television, print advertising, digital media, direct mail, trade shows, etc., to leverage their features to reach precisely the right customers you need.

Once you’ve identified which segments will be most eager to purchase your goods or services, you can create advertising campaigns that cater specifically to their needs and preferences. You should also consider what types of promotional activities may be best suited for each target segment—perhaps developing special offers catering to a specific segment or offering unique incentives through loyalty programs tailored for these customers are all good ideas. In addition, strategies such as geographical targeting might be useful; e.g., sending different messages in different geographic markets according to their particular challenges or needs.


In conclusion, STP analysis is a useful tool for all businesses of any size and within any industry. While the process can be complex, the principles remain the same in that you must segment, target and position your products appropriately to acquire new customers and retain existing ones. The better you manage each stage in the process, the more success you’ll have in reaching your ultimate business objectives.

By considering STP analysis in tandem with your overall marketing strategy, you can develop a plan that is both effective and tailored to your customer’s needs.