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