Segmentation, Targeting,
Positioning (STP) and Customer
Value Proposition
STP Marketing and the
Evolution of Marketing
Strategy
1. Target Market: A sub-group of a larger market chosen as the
focal point for a marketing or advertising campaign. Positioning:
Designing and representing a brand in a way that is distinct in the
consumer’s mind.
2. Positioning Strategy: Selecting key themes to communicate
to a target market.
3. Marketing Strategy: Evolves as a result of 1-3
2
Beyond STP—Regular Assessment
1. Reassess segmentation strategy:
Exam the current target segment to develop new and
better ways of meeting its needs.
Change the target and reposition the brand to a new
segment.
2. Pursue product differentiation strategy:
Emphasize or create differences in brands to distinguish
them from competitors.
Advertising plays a critical role because the consumer will
have to be convinced that the difference is meaningful.
3
Identifying Target Segments:
Market Segmentation
Geography
Demographics Psychographics
Lifestyles Commitment
Levels
Benefits
Usage Patterns
4
The STP Marketing Process
(Segmenting, Targeting, Positioning)
1. Break the broad market into smaller, more
homogenous segments
2. 2. Specifically target discrete market segments
3. 3. Position the brand to appeal to the targeted
segments
5
Segmenting by Usage
and Commitment
Advertising and promotion targeted to:
o Heavy users
o Nonusers
o Brand-loyal users
o Switchers/Variety seekers
o Emergent Consumers
o Point of entry marketing strategy
6
Demographic Segmentation
o Age
o Gender
o Race
o Marital Status
o Income
o Education
o Occupation
7
Geographic
Segmentation
oCountry
oRegion
oState
oCity
oNeighborhood
oGeo-demographic
Psychographics and Lifestyle
Segmentation
Lifestyle
Opinions Activities
Interests
Lifestyle segmentation
provides insight into
consumer’s motivations
9
Business to Business
Markets
o Markets segmented by:
o Usage rates
o Geographic location
o Stage in the purchase process: first time vs.
experienced buyers
o Benefits desired
Prioritizing Target Segments
1. Examine your ability to deliver value to the
segments and costs of new capabilities—
distinct competencies of the firm
2. Research segment size, growth potential
and usage frequency
3. Assay the competitive environment
4. Find a niche you can scratch
Effective Positioning
oDeliver on the brand promise
oThere is magic in consistency
oMake the positioning different and simple for
consumers to understand
Positioning PERCEPTUAL MAP
Definition: A spatial representation of how target
customers perceive competing brands
Brands that are perceived to be similar are located close to each other
Brands that are perceived to dissimilar are further apart
Use the perceptual map to:
Determine how target customers perceive the product
Identify competitors
Select a positioning
Select a Positioning
There are four general positioning strategies:
• Head-on
• With an Idea
• For Social Accountability
• U.S.P. - Unique Selling Proposition
Select a Positioning
Product
Value
Attribute(s)
Away from Benefit(s)
Competitors H
G Offered
C
A
D
E
Against a B Product
F
Competitor Usage
Product User Cultural Symbols
Fundamental Positioning
Themes
oBenefit Positioning
oUser Positioning
oCompetitive Positioning
Repositioning
o Used to revive an ailing brand or fix a
lackluster new market entry
o Advertising themes and positioning
can be trendy and become outdated
o The challenge: Changing perceptions
of a brand forged over years of
advertising.
Capturing the Value Proposition
Functional V
Emotional A
Self-expressive
L Relative Price
Benefits
U
E
