The STP Process in Marketing Management


STP stands for segmentation, targeting and positioning.

STP, which stands for segmentation, targeting, and positioning, is a fundamental concept in marketing management. It is usually the first step in developing a marketing plan. The three parts of the concept maximize exposure and market saturation by looking at the most important factors that impact how a good or service will be received.

What Is STP Marketing?


Segmentation is the process of breaking down large target markets into smaller, submarkets made of consumers with commonalities. These similarities are usually in buying habits and life desires. Demographic segmentation divides consumers by gender, age, income, occupation, education, and other factors. The breakdown also bases on geography and lifestyle. The benefits of segmentation in a marketing strategy include helping focus on segments of consumers and figuring out how to appeal to them.

Ways to segment your audience include:

1. Demographics

Breakdown by any combination: age, gender, income, education, ethnicity, marital status, education, household (or business), size, length of residence, type of residence or even profession/Occupation.

An example is Firefox who sell ‘coolest things’, aimed at a younger male audience. Though, Moshi Monsters, however, is targeted to parents with fun, safe and educational space for the younger audience.

2. Psychographics

This refers to ‘personality and emotions’ based on behavior, linked to purchase choices, including attitudes, lifestyle, hobbies, risk aversion, personality, and leadership traits. magazines read and TV. While demographics explain ‘who’ your buyer is, psychographics inform you ‘why’ your customer buys.

There are a few different ways you can gather data to help form psychographic profiles for your typical customers.

  1. Interviews: Talk to a few people that are broadly representative of your target audience. In-depth interviews let you gather useful qualitative data to really understand what makes your customers tick. The problem is they can be expensive and difficult to conduct, and the small sample size means they may not always be representative of the people you are trying to target.
  2. Surveys: Surveys let you reach more people than interviews, but it can be harder to get as insightful answers.
  3. Customer data: You may have data on what your customers tend to purchase from you, such as data coming from loyalty cards if an FMCG brand or from online purchase history if you are an e-commerce business. You can use this data to generate insights into what kind of products your customers are interested in and what is likely to make them purchase. For example, does discounting vastly increase their propensity to purchase? In which case they might be quite spontaneous.

3. Lifestyle

This refers to Hobbies, recreational pursuits, entertainment, vacations, and other non-work time pursuits. Some hobbies are large and well established, and thus relatively easy to target,. However, some businesses have found great success targeting very small niches very effectively.

4. Belief and Values

Refers to Religious, political, nationalistic and cultural beliefs and values.

6. Geography

Drill down by Country, region, area, metropolitan or rural location, population density or even climate.

7. Behavior

Refers to the nature of the purchase, brand loyalty, usage level, benefits sought, distribution channels used, reaction to marketing factors.

In a B2B environment, the benefits sought are often about ‘how soon can it be delivered?’ which includes the ‘last minute’ segment –  the planning in advance segment.

Levels of Market Segmentation

Mass Marketing:

The seller engages in mass production, mass distribution, and mass promotion of one product to all buyers. Mass marketing creates the largest potential market, which leads to the lowest costs, which in turn can lead to lower prices or higher margins. Nowadays the explosion of advertising media and distribution channels has made it difficult and increasingly expensive to reach a mass audience.


Many companies are turning to micro marketing these days by choosing one of the four levels; Segment marketing, Individual marketing, Niche marketing, Local marketing.

Individual marketing:

Extreme marketing in which marketers focus on individual customers. Keep track of individual tastes and preferences of individual customers. Many companies are approaching individuals through e-mails to promote their products.

Niche Marketing:

Marketers effort to position their product or service in smaller markets that have similar attributes and have been neglected by another marketer.


Once the consumer market has been divided into segments, the marketer proceeds to the second step of picking exactly who he should target. The targeting stage involved matching the abilities of the marketing plan with the needs of the consumers. Factors like segment size, growth and investment must be considered to ensure the plan doesn’t overreach or underachieve. Return on investment is also considered in this phase to make sure the target market is worth advertising too.

The list below refers to what’s needed to evaluate the potential and commercial attractiveness of each segment.

  • Criteria Size: The market must be large enough to justify segmenting. If the market is small, it may make it smaller.
  • Difference: Measurable differences must exist between segments.
  • Money: Anticipated profits must exceed the costs of additional marketing plans and other changes.
  • Accessible: Each segment must be accessible to your team and the segment must be able to receive your marketing messages
  • Focus on different benefits: Different segments must need different benefits.


The final stage in the STP strategy is positioning the product in the market. Positioning is based on price, product competition, and end-goal strategy. Decisions like which stores will carry a product, on which media it will be advertised, and how it will be sold come into play. The wording of marketing materials and times advertisements will run must also be considered in the positioning plan.


The most important concept within STP marketing is to have all three stages mesh together to form one fluid plan. Segmentation leads to the right target markets, which leads to the right positioning strategy. If at any point in the marketing management process one of the aspects of the STP plan change, you must start from segmentation and rework the strategy. One stage of STP without the others is destined to fail.

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