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In marketing, segmenting, targeting and positioning (STP) is a framework that implements market segmentation. [1] Market segmentation is a process, in which groups of buyers within a market are divided and profiled according to a range of variables, which determine the market characteristics and tendencies. [2]
Market segmentation is the process of dividing mass markets into groups with similar needs and wants. [2] The rationale for market segmentation is that in order to achieve competitive advantage and superior performance, firms should: "(1) identify segments of industry demand, (2) target specific segments of demand, and (3) develop specific 'marketing mixes' for each targeted market segment ...
The precise origins of the positioning concept are unclear. Cano (2003), Schwartzkopf (2008), and others have argued that the concepts of market segmentation and positioning were central to the tacit knowledge that informed brand advertising from the 1920s, but did not become codified in marketing textbooks and journal articles until the 1950s and 60s.
Market segmentation can be defined in terms of the STP acronym, meaning Segmentation, Targeting, and Positioning. Segmentation involves the initial splitting up of consumers into persons of like needs/wants/tastes. Commonly used criteria include:
One of the most significant uses of industrial market segmentation schemes is to make targeting and product positioning decisions. Companies chose to target some segments and downplay or avoid other segments in order to maximize their competitive advantage and the likelihood of success.
In conjunction with targeting decisions, marketing managers will identify the desired positioning they want the company, product, or brand to occupy in the target customer's mind. This positioning is often an encapsulation of a key benefit the company's product or service offers that is differentiated and superior to the benefits offered by ...
Target marketing goes against the grain of mass marketing. It involves identifying and selecting specific segments for special attention. [2] Targeting, or the selection of a target market, is just one of the many decisions made by marketers and business analysts during the segmentation process. Examples of target markets used in practice ...
Porter suggested combining multiple strategies is successful in only one case. Combining a market segmentation strategy with a product differentiation strategy was seen as an effective way of matching a firm's product strategy (supply side) to the characteristics of your target market segments (demand side). But combinations like cost ...
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