Mastering Segmentation, Targeting, and Positioning (STP)

1. Market Segmentation: The Foundation of Promotion

The first step in the process of product promotion is Segmentation. Market Segmentation is the division of a broad market into smaller segments comprising individuals who share similar characteristics, needs, and interests, and show inclination towards similar products and brands.

This process involves creating small groups (segments) within a large market to bring together consumers who have similar requirements and interests. The individuals in a particular segment respond to similar market fluctuations and often require identical products. In simpler words, market segmentation can also be called Grouping.

Examples of market segments include:

• Kids form one segment.
• Males can be part of a similar segment, while females form another segment.
• Students belong to a particular segment, whereas professionals and office goers can be kept in one segment.

2. Targeting: Selecting Your Audience

Once the marketer creates different segments within the market, they then devise various marketing strategies and promotional schemes according to the tastes of the individuals in that particular segment. This process is called Targeting.

Targeting is the second stage, performed once the markets have been segmented. Organizations use various marketing plans and schemes to target their products among the selected segments.

Key examples of effective targeting:

• Nokia offers handsets for almost all segments. They understand their target audience well, ensuring each handset fulfills the needs and expectations of the target market.
• Tata Motors launched the Tata Nano especially for the lower income group.

3. Positioning: Creating Product Perception

Positioning is the last stage in the Segmentation, Targeting, and Positioning (STP) cycle. Once the organization decides on its target market, it strives hard to create a specific image of its product in the minds of the consumers. Marketers create a first impression and lasting perception of the product through effective positioning.

Positioning helps organizations establish how their products are perceived by the target audience.

Examples of Brand Positioning

• Luxury vs. Value: Ray Ban and Police Sunglasses cater to the premium segment, while Vintage or Fastrack sunglasses target the middle-income group. Ray Ban sunglasses typically have no takers among the lower-income group, illustrating clear positioning.
• Garnier Merchandise: Garnier offers a wide range of merchandise targeted specifically at different market segments (Men, women, teenagers, and older generations).

Garnier's Segment-Specific Offerings:

• Men: Sunscreen lotions, Deodorant
• Women: Daily skin care products, hair care products
• Teenagers: Hair color products, Garnier Light (Fairness cream)
• Older Generation: Cream to fight signs of aging, wrinkles

A female would never purchase a sunscreen lotion meant for men, and vice versa. This differentiation is the essence of brand positioning.