What is STP?
Segmentation
Segmenting is the process of dividing the market into segments based on customer characteristics and needs.
The main activity segmenting consists of four sub activities. These are:
1. Determining who the actual and potential customers are
2. Identifying segments
3. Analyzing the intensity of competitors in the market
4. Selecting the attractive customer segments.
And it’s expected buying behavior, a
process of segmenting and positioning
is needed.
Targeting
After the most attractive segments are selected, a company should not
directly start targeting all these segments other important factors come into
play in defining a target market. Four sub activities form the basis for
deciding on which segments will actually be targeted.The four sub activities within targeting are:
1. Defining the abilities of the company and resources needed to enter a market
2. Analyzing competitors on their resources and skills
3. Considering the company’s abilities compared to the competitors' abilities
4. Deciding on the actual target markets.
The first three sub activities are described as the topic competitor analysis. The last sub activity of deciding on the actual target market is an analysis of the company's abilities to those of its competitors.
Positioning
When the list of target markets is made, a
company might want to start on deciding on a good marketing mix directly. But
an important step before developing the marketing mix is deciding on how to
create an identity or image of the product in the mind of the customer.
1. Identifies the differential advantages in
each segment
2. Decides on a different positioning concept
for each of these segments. This process is described at the topic positioning here different concepts of positioning are
given.
The analysis done of the market, competitors and abilities of the company
are necessary to create a good positioning statement. When the positioning
statement is created, one can start on creating the marketing mix.
