STP Marketing Strategy Overview

Introduction to STP Model

• STP stands for Segmentation, Targeting, and Positioning.
• Important model for developing marketing strategies to create customer value.

Key Issues in Marketing Strategy

1. Target Customer Selection
   • Identify which customers to sell to.
   • Segment the market based on attractiveness.
   • Decide how to compete and serve the target market effectively.

Components of STP

1. Market Segmentation

• Definition: Identifying parts of the market with similar needs and wants.
• Segment Size: Can range from large segments to niche segments.
• Segmentation Variables:
  • Demographic Segmentation: Age, gender, income.
  • Geographic Segmentation: Where consumers live.
  • Behavioral Segmentation: Consumer behaviors and preferences.
• Benefits of Segmentation:
  • Focused marketing efforts.
  • Accurate marketing mix development.
• Challenges:
  • Overlap between segments.
  • Dynamic nature of market segments.

2. Targeting

• Three Targeting Strategies:
  1. Mass Marketing (Undifferentiated Targeting):
     • Targets the whole market without segmentation.
     • Difficult to meet diverse customer needs.
  2. Differentiated Targeting:
     • Targets specific segments within the broader market.
     • Requires separate marketing plans and mixes for each segment.
  3. Niche/Concentrated Marketing:
     • Focus on a small, profitable niche.
     • Aim to build a strong market position quickly.

3. Market Positioning

• Definition: Deciding how to compete effectively in the chosen target market.
• Value Proposition:
  • Must be defined from the customer’s perspective.
  • Determines product's market position.
• Positioning Map:
  • Visual tool to map products based on dimensions like price and quality.
  • Helps identify market gaps.
• Key Consideration: Positioning should cater to customer perceptions of value.

Positioning Strategies

1. More Value for Low Price:
   • Offer high perceived value at a low price.
2. More for the Same Price:
   • Enhance product features or performance while maintaining the price.
3. Different Ways to Deliver Value:
   • Understand how customers perceive value to create competitive advantage.

Conclusion

• Overview of STP model highlights importance of segmentation, targeting, and positioning in marketing strategy.
• Upcoming videos will delve deeper into each component of STP.