Before a marque decides what to sell, astatine what price, aliases done which channel, it has to reply 3 questions: who is the customer, which customers are worthy chasing, and why should they take us? That is precisely what STP answers - and it is the model interviewers expect you to scope for first, earlier you touch the 4Ps.
TL;DR
- STP runs successful order: Segmentation (divide the market) → Targeting (choose whom to serve) → Positioning (own a abstraction successful the customer's mind). Every trading strategy starts here.
- There are 5 ways to conception a market: Geographic, Demographic, Psychographic, Behavioral, and Firmographic (for B2B).
- A conception is only worthy serving if it passes 5 tests: Measurable, Accessible, Substantial, Differentiable, and Actionable.
- Four targeting strategies waste and acquisition scope for focus: Undifferentiated (mass), Differentiated (multi-segment), Concentrated (niche), and Micromarketing (customized).
- Positioning rests connected Points of Parity (must-haves to compete) and Points of Difference (why you win) - a POD must beryllium desirable, deliverable, and differentiating.
- Use the positioning-statement template: "For [target] who [need], [brand] is the [category] that [point of difference] because [reason to believe]."
- In interviews, ever tally STP earlier the 4Ps - conception first, past target, past position, and warrant each prime retired loud.
What STP Is, and Why It Comes First
STP is the foundational strategical model successful marketing. It helps a marque place the correct customers, attraction constricted resources connected them, and trade a worth proposition those customers really attraction about. The 3 steps are sequential for a logic - you cannot position a merchandise until you cognize who you are positioning it for, and you cannot take whom to service until you person divided the marketplace into groups worthy choosing between.
This is why STP sits upstream of each tactical decision. Segmentation, Targeting, and Positioning specify the who and the why; the 4Ps that travel are simply the how.
The Big Picture: STP successful Three Moves
| Segmentation | Who is successful this market, and really do the buyers differ? | Distinct customer groups pinch shared needs |
| Targeting | Which of those groups should we really serve? | Chosen segment(s) positive a targeting strategy |
| Positioning | Why should the target prime america complete everyone else? | A clear, defensible spot successful the customer's mind |
Get the bid incorrect and the full strategy wobbles - positioning built connected a conception you ne'er defined is conscionable a slogan.
1. Segmentation: Dividing the Market
Market segmentation splits a wide marketplace into chopped subgroups of consumers who stock needs, characteristics, aliases behaviors. There are 5 communal bases for doing it.
| Geographic | Location | Region, climate, metropolis tier, urban/rural, density | Zara targets Tier-1 metros; Amul focuses connected Tier 2-3 towns |
| Demographic | Population traits | Age, gender, income, education, occupation, family size | Tanishq targets women aged 25-45 pinch mid-to-high income |
| Psychographic | Psychological traits | Lifestyle, values, personality, attitudes, interests | Apple targets innovation-seekers who worth creation & simplicity |
| Behavioral | Consumer actions | Usage rate, loyalty, acquisition occasion, benefits sought | Spotify splits free vs premium users; Amazon Prime vs regular |
| Firmographic (B2B) | Company traits | Industry, size, revenue, location, exertion stack | Salesforce targets enterprises pinch 500+ employees |
The aforesaid merchandise class tin beryllium sliced very otherwise depending connected the base. Amul and Zara some waste to India, but Amul segments geographically toward smaller towns while Zara concentrates connected Tier-1 metros - 2 other calls, each defensible erstwhile you cognize which customer each marque is built to serve.
2. Targeting: Choosing Whom to Serve
Once the segments exist, the patient evaluates them and decides really many, and really precisely, to serve. Four strategies beryllium connected a spectrum from "everyone" to "one customer astatine a time."
| Undifferentiated (Mass) | One offering for the full market | Large market, commodity products | Coca-Cola's cosmopolitan "Open Happiness" campaigns |
| Differentiated (Multi-Segment) | Different offerings for different segments | You person the resources to service respective segments | Toyota: Yaris (budget), Camry (mid), Lexus (luxury) |
| Concentrated (Niche) | Focus connected 1 circumstantial segment | Limited resources, heavy expertise | Rolls-Royce targeting ultra-high-net-worth individuals |
| Micromarketing (Customized) | Tailored to individual customers | High-value customers; exertion enables it | Dell's civilization PC configurations; Netflix recommendations |
A conception is only worthy targeting if it clears 5 attractiveness tests:
3. Positioning: Owning a Space successful the Customer's Mind
Positioning is the deliberate prime of what you want the target customer to deliberation and consciousness astir your marque comparative to competitors. It is built connected 2 ideas.
| Points of Parity (POP) | Associations you request conscionable to beryllium considered a morganatic subordinate successful the category | Present - without the must-haves, customers won't moreover see you (a smartphone needs a camera, touchscreen, and app store) |
| Points of Difference (POD) | Unique attributes that group the marque isolated from rivals | Desirable to customers, Deliverable by the company, and Differentiating from competitors (Volvo = safety; Apple = creation + simplicity) |
A perceptual map - plotting competing brands connected 2 dimensions specified arsenic value vs value - is the instrumentality marketers usage to spot positioning gaps worthy owning. Once the spread is chosen, the position gets written down successful a azygous sentence:
"For [target market] who [need aliases want], [brand] is the [category] that [point of difference] because [reason to believe]."
"For health-conscious millennials who want convenient nutrition, Epigamia is the Greek yogurt marque that offers high-protein, low-sugar options because it uses authentic straining techniques pinch earthy ingredients." Notice really the connection names the target, the need, the category, the constituent of difference, and the logic to judge - each successful 1 line.
Structuring an STP Interview Answer
"How would you attack a go-to-market scheme for a caller product?"
Interviewers are grading the series arsenic overmuch arsenic the contented - tally STP first, successful order, and only past scope for tactics.
- Segment - disagreement the marketplace and authorities your ground (geographic, demographic, psychographic, aliases behavioral), and opportunity why you chose it.
- Target - prime the segment(s) and sanction the strategy (niche, differentiated, mass), justified against the 5 attractiveness criteria.
- Position - specify your Points of Parity and Point of Difference, past authorities a one-line positioning statement.
- Then, and only then, the 4Ps - construe that positioning into Product, Price, Place, and Promotion decisions.
Pro Tip: Always warrant your segmentation ground and targeting prime retired loud. Interviewers are listening for the reasoning down the labels, not the labels themselves.
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