What is STP Strategy



STP stands for segmentation, targeting, and positioning. It is one of the most popular marketing strategies used by companies to understand their customers and come up with a strategy to target them with the right product or service.

This strategy involves dividing the market into segments based on various parameters, targeting a particular segment, and positioning the product or service to that segment. Through this strategy, companies can maximize their sales and reach their target audience effectively.

In the following paragraphs, we will discuss the different components of the STP strategy in detail:

Definition of STP Strategy

The STP (segmentation, targeting and positioning) strategy, is an approach to marketing used to create the right product mix and message that appeals to a particular target audience. STP stands for Segmentation, Targeting and Positioning. It is a way of dividing a market into smaller segments with similar characteristics and selecting one or more segments as the target of marketing activities. Once the target market is identified, a company can focus on positioning its product in such a way that it stands out from competitors’ offerings in order to attract the attention of potential consumers in the target market.

The STP Strategy looks at all three elements of segmentation – who, what, where and why. Who are you targeting? What goals do you have? Where does your product fit? And why? A good STP Strategy will take all three into account when creating an appropriate marketing mix for your target segment.

By segmenting their markets appropriately, marketers not only gain clarity and focus in their marketing efforts but also maximize profitability by understanding better which customer should receive which offer. Segmentation fosters growth as it enables marketers to add additional products or services that appeal specifically to niche groups within their customer base, thereby enabling them to capture more incremental revenue opportunities without sacrificing reach or efficiency of advertising campaigns.

What is STP Strategy?

STP stands for segmentation, targeting, and positioning. It is a marketing strategy that aims to identify consumer segments or target markets for your product or service, and then position your offerings in a way that best meets the needs of that market. By using this strategy, you can ensure that you are reaching the right customers with the right product or service.

In this article, we will be discussing the concept of STP strategy in more detail.


Segmentation is an important part of any STP (segmentation, targeting, positioning) marketing strategy. To segment a market effectively, marketers must first identify and understand the wants and needs of a company’s customers. Segmentation involves dividing buyers into groups with similar characteristics that could influence their responses to marketing strategies. Marketers can base segmentation on one or multiple variables such as geography, age, occupation, lifestyle or income level.

Geographic segmentation divides consumers according to where they live geographically – for example, by city, region or country. Demographic segmentation divides people according to demographic factors such as age, gender and family size. Psychographic segmentation looks at lifestyle factors such as attitudes and values while behavioral segmentation classifies consumers by their attitudes and behaviors toward products or services.

Once the market has been divided into segments – also known as target markets – the next step is to select the most appropriate target markets to focus its efforts on given budget constraints and other limitations. In this way marketers can decide which market segments have a greater opportunity for growth or higher profitability within the context of their business objectives.


Once your business has identified its niche market, the next step is to understand the needs, wants and preferences of that market. This allows you to tailor your products and services so they more closely meet the demands of consumers. Targeting is all about selecting and focusing on that group of consumers who are most likely to purchase from you. This can involve any number of activities—ranging from geographic segmentation to demographic variables or even psychographic preferences such as core values or beliefs.

Once you have done this, it is time to consider positioning – understanding how you want people to perceive your brand in comparison with other competitors within the market. Positioning involves creating a unique platform for your company which makes it stand out from rivals, focusing attention on key aspects in order to build brand awareness and convince people why they should purchase your product.

Once these processes have been completed, the final part of this strategy is promotion – implementing tactics designed to reinforce positioning and increase sales. This often involves activities such as advertising campaigns and special offers designed to attract new customers while retaining existing ones – surely key elements in any successful business plan.


Positioning is the last step of the STP process, where companies create a unique and proprietary place in the mind of their target customers. This positioning must distinguish the product from its competition in the areas of product features, pricing, channels of delivery, service requirements, promotional approach and use territory. All these factors should converge to create a distinct perception about the company’s brand among its target customers.

The positioning relies upon developing meaningful differences between products and services so that instead of shoppers having to compare similar products from different vendors, they can blindly purchase one particular brand as it has some unique offers or benefits over competition. For example, Apple Inc.’s Mac computers are positioned for high end users who need more power and design capabilities than PCs provide; similarly Ikea furniture are styled innovatively to meet people’s own creative needs. The goal here is to make sure potential buyers instantly understand how they will benefit from one particular product or service compared with alternatives available in market.

Benefits of STP Strategy

STP (segmentation, targeting and positioning) is an important marketing strategy that helps businesses identify their target audience and position their products or services in the market. The STP strategy can be used to create a unique identity for the business, build customer loyalty and increase sales.

Let’s explore the benefits of STP and how it can help businesses achieve success:

Increased Profitability

Developing an STP (segmentation, targeting, and positioning) strategy can help businesses increase their profitability. By dividing the market into smaller groups of customers with similar needs, STP makes it easier to identify the target customers and focus on products and services that are more likely to appeal to them. This results in allocating limited resources more efficiently and reducing costs by reaching a narrower audience more effectively.

STP also enables companies to craft better messages tailored for specific customers who have certain needs or interests – it communicates the message in a way that resonates with a particular customer segment. This leads to better brand recognition, improved customer loyalty, increased conversion rates and overall increased profitability.

Additionally, when companies identify the unique advantages within each product or service they offer, they can position themselves strategically against competitors in terms of product/service features – this helps them

  • attract more customers
  • retain existing ones

Improved Brand Recognition

In marketing, the STP (segmentation, targeting, positioning) technique is a tool used to analyze and identify target audiences for your products and services. Through segmentation, you break audiences into distinct parts based on shared characteristics; through targeting, you select the segments that you will concentrate on; and with positioning, you carefully craft a message that defines how those services are valuable to your target group.

Using an STP strategy can provide businesses with several advantages. Most notably, improved brand recognition is one of the key benefits of an effective STP strategy. By carefully selecting which types of customers you target and honing messages to reflect their values and needs specifying why your product is genuinely helpful to them in their lives encourages customers to associate your product or service with value and quality. Ultimately, this raises brand awareness and increases repeat customers among those who’ve already associated your brand with trust.

Enhanced Customer Loyalty

When a company implements an STP strategy, it is aiming to create a highly targeted approach to marketing that aims to capture the attention of loyal and potential customers. Instead of using mass approaches such as email blasts or radio/television commercials, this approach is more refined. By carefully understanding customer segments and crafting messages tailored to those segments effectively increases engagement and leads customers deeper into their purchasing journey.

An effective STP strategy provides these enhanced benefits:

  • Allows product offers that are purposefully aligned with consumer needs
  • Offers direct access to loyal consumers, resulting in a more precise approach for new loyalty development
  • Enhances customer relationships through a customized value proposition that plays directly to customer interests and motivations
  • Increases the likelihood of creating longer lasting customer relationships through increased customer loyalty
  • Generates repeat customer purchases leading to higher profitability

How to Implement an STP Strategy

A STP strategy is a customer-centric approach to marketing that seeks to segment customers into different groups in order to tailor the product or service to the specific needs of each group. It helps companies develop their marketing strategies more effectively and efficiently.

In this article, we’ll discuss how to implement an STP strategy in order to maximize customer satisfaction and loyalty:

Identify Segments

Identifying segments is the first step when it comes to developing an STP (segmentation, targeting, and positioning) strategy. Segmentation is the practice of dividing a market into smaller groups of customers who share similar characteristics. These characteristics are often referred to as segmentation criteria and can be based on demographic factors such as age, gender, and income; psychographic factors such as lifestyle or personality; geographic factors such as location or political boundaries; or behavioral factors such as preferences, brand loyalty and purchase history.

The goal is to identify groups of people that have similar needs that can then be targeted by tailoring your offerings specifically to those needs. Before doing so, you must define exactly who you’re targeting by gathering information on each potential target audience. This typically includes studying trends in the industry and analyzing customer interactions captured through surveys, focus groups, online reviews and more.

By taking current customer segments into consideration—as well as understanding past sales figures—you can gain important insights into who needs certain services or products and assess whether there are opportunities for expansion in new market segments. You may also need to look at existing competitors or assess substitutes for your own offerings in order to gain a better understanding of how different segmentations exist within the existing industry landscape.

Select Target Markets

When creating an STP strategy, it’s important to select the target markets that present the most opportunities. There are three primary methods available when selecting target markets; segmentation, positioning and targeting.

Segmentation allows for a focus on those customers with the greatest potential. The aim is to divide customers into groups based on consumer behaviors such as demographics (age, spending power, lifestyle), psychographics (attitudes, beliefs) and geography (location).

Positioning is about gaining advantage by identifying what makes your product or service different from competitors’ offerings, and how that difference appeals to specific customer segments. Positioning involves both internal capabilities of the company and external conditions of the market place.

Targeting requires deciding exactly which segments should be served by selecting one or more segments to enter. It considers capabilities of a company against available resources they have in order to assess whether they have the capacity to serve their chosen targets. A good tactic is to prioritize certain segments first or clusters at once instead of attacking all segments at once.

The STP process stimulates demand by creating individualized customer communications instead of trying to reach every customer with a generic message or solution. Ultimately, implementing an effective STP strategy will ensure a clear focus resulting in increased profits and customer loyalty.

Develop Positioning Strategies

Every business needs to create and deploy effective positioning strategies to ensure that its target customers receive a consistent and clear message about the products and services offered. Identifying consumer segments, target markets, and individual customer interests are just a few of the steps to creating successful positioning strategies that can drive sales.

The STP process (segmentation, targeting, and positioning) helps your company identify its unique selling points (USPs) and then design marketing strategies tailored to reach specific market segments. To begin building an effective STP strategy, start by segmenting your audience into groups based on common criteria such as demographic characteristics, lifestyle choices or product preferences. Within each segment, identify target markets you wish to pursue with specific messages tailored for each one. Use customer profiling data if available or focus groups as tools for gathering relevant insights into what messages appeal most to each segment.

Once you have identified the segments and corresponding messages that will recruit them more effectively, implement a comprehensive campaign across appropriate media channels. Developing suitable collateral such as one-on-one sales emails or digital ads is an equally important step in deploying an effective STP strategy that will drive higher conversions from prospects already interested in your product. By creating visually appealing narrative based on their real needs, you’ll build awareness about what makes your products stand out from competitors’ offerings and deliver them via meaningful campaigns designed around their interests!


The STP strategy is a vital marketing tool in achieving the objectives of sales and marketing. An effective STP strategy enforces an organization’s market segmentation, as it helps them identify target audiences and put resources into winning high-value customers over competitors. By effectively configuring a well-defined STP for different products, organizations can target better and more efficiently to venture more into the market.

A good STP strategy helps an organization stay ahead of their competition. It assists marketers to generate important insights about their target audience and divide the total offered markets into smaller segments, targeting each segment specifically with customized communications according to market requirements and needs.

All in all, a carefully devised segmentation process enhances an organization’s marketing capabilities and make it easier for them to reach their ideal customers through matching product offerings accurately with consumer needs while enabling better pricing management as well as sales promotions planning.