In the field of understanding marketing, Segment Targeting and Positioning (STP) are essential for businesses to effectively reach their target audience and succeed in a competitive market. STP involves the process of identifying different market segments, selecting specific segments to target and developing strategies to position products or services to meet the selected segments.
Segmentation in Buainess
Segmentation is the first step in the STP process where the market is divided into different groups based on several criteria such as demographic psychographic behaviour and geographic location. Through segmentation, marketing companies better understand the different needs and preferences of different customer groups. This allows for more targeted marketing and the development of customized products or services that meet the segments’ requirements.
Targeting in Business
After segmentation, the next step is targeting, which involves assessing the attractiveness of each market segment and selecting one or more segments to focus on. Targeting requires careful analysis of factors such as segment size growth potential competition and compatibility with organizational capabilities. By choosing the most viable segments to target, companies can target their resources more effectively and reach their desired audience.
Positioning in Business
Once the target segments are identified, the last step in the STP process is positioning. Positioning means creating a clear and positive perception of the product or service in the target group. This is achieved by highlighting the offer’s unique benefits and value propositions compared to competitors. Effective positioning helps differentiate a brand in a crowded market, increase customer loyalty and guide purchase decisions.
For example, a luxury car manufacturer can segment the market based on income level and lifestyle preferences, targeting high-income earners who value prestige, performance, and status. Their vehicles as symbols of status and sophistication. This strategic approach allows a company to focus its marketing on a specific group of affluent consumers who are more likely to be interested in luxury cars.
Finally, mastering the concepts of segment targeting and positioning is essential for companies that want to succeed in today’s competition in the market. By understanding the unique needs and characteristics of different market segments, identifying the most promising target audience and strategically positioning products or services, companies can create a strong competitive advantage and drive growth and profitability.
References
Kotler, P., & Keller, K. L. (2016). Marketing management (15th ed.). Pearson.
Ries, A., & Trout, J. (2000). Positioning: The battle for your mind. McGraw-Hill Education.
