The STP process involves 5 steps: 1. Establish strategy and objectives by narrowing company goals and using SWOT analysis. 2. Use segmentation methods like geographic, demographic, psychographic, and behavioral to divide the market into groups with common traits. 3. Evaluate segment attractiveness based on identifiability, size, reachability, responsiveness, and profitability. 4. Select the target market that is most likely to purchase by choosing an undifferentiated, differentiated, concentrated, or micromarketing approach. 5. Develop a positioning strategy by identifying customer wants, competitor offerings, your company's solution, and a value proposition explaining why customers should choose your product.

1. STP Process
SEGMENTATION, TARGETING, POSITIONING

2. What is STP?
SEGMENTATION TARGETING POSITIONING

3. STEP 1: Establish Strategy or Objectives
Narrow down company objectives
The best time to use SWOT
Market segmentation is useful to all company types, whether they are B2B, B2C, or
even non-profit

4. STEP 2: Use Segmentation Methods
Must also pay attention to the criteria of segmentation
Market is divided into groups based on common characteristics
Geographic- Where are they? Demographic- What is their structure? Psychographic- Who are they? Benefit- What will they gain? Behavioral- How will they use?
Segments the market to help company understand customer profiles

5. Step 2: Use Segmentation Methods, Cont.
Geographic:
Continent
Country
State
City
Demographic:
Gender
Age
Education
Income
Psychographics:
Values
Attitudes
Lifestyle
Interests
Benefits:
Convenience
Economics
Behavioral:
Occasion
Loyalty
Engagement
Usage

6. Step 2:
Segmentation
Methods, Cont
Criteria of
Segmentation
Simplicity and cost effectiveness
Potential for increased profit
Similarity of needs within segment
Difference of needs within segment
Potential of marketing to reach segment

7. Step 3: Evaluate
Segment
Attractiveness
Identifiable: The segment needs to be distinct to make
marketing effective
Substantial: needs to be big enough to provide business to
Reachable: Is the market reachable?
Responsive: Will the customers respond positively?
Profitable: Will it make a profit?

8. Step 4: Select Target Market
Now that the target markets have been identified and evaluated, it is time
for the company to select their target market
Target market: Specific segment of customers who are most likely to
purchase the service/product
Selecting an appropriate target market is important to a business because
they must obtain the best return on investment possible

9. Step 4: Select
Target
Market, Cont.
Undifferentiated:
Mass marketing
Differentiated:
Targets several
market segments
in different ways
Concentrated: One
primary market
gets focus
Micromarketing:
Custom marketing
to very small
groups (one-to-
one marketing)

10. Step 5:
Identify and
Develop
Positioning
Strategy The company will develop a value proposition to
explain to customers why they should choose the
company’s product or service.
In this step, the target market has been identified and
now the company must identify an opportunity for
marketing and develop a solution based on their
findings.

11. STEP 5: Positioning
Strategy, Cont.
What the
customer wants
What your
competition
provides
What your
company
provides
Value Proposition
Value
Proposition