Market segmentation, targeting and positioning are the three components of what is commonly known as the S-T-P strategy. Each step contributes to the development of a targeted promotional plan. The process begins with brainstorming potential customer types and ends with the formulation of a strategy for promoting value to those customers.
Brainstorming Marketing Segments
The segmentation step of S-T-P involves general brainstorming of all of the distinct types of customers that your business could target. During this phase, you can choose from various methods, such as demographic, geographic, lifestyle, psychographic or usage rate factors. A local business with a universal product might target a local geographic market, for instance. A trendy wireless company might focus on younger, tech-savvy customers. The goal is to identify as many substantial, but distinct, market segments as possible.
Targeting Preferred Segments
A business typically can’t be all things to all people. Small businesses have limited resources to invest in developing and promoting solutions to customer groups. During targeting, you identify the market segment you feel is the most profitable or offers the best long-term value for your business. That segment becomes your company’s focal point. Over time, once you have firmly established yourself in one market, you might expand into another profitable market.
You apply the positioning step when you develop a strategy that outlines how you intend to offer a solution that is bigger, better or more beneficial to target customers than what competitors offer. This strategy, and your positioning statement, serve as the framework for ongoing product development and promotional messaging. If you emphasize the organic attributes of your brand, which appeal to a health-conscious segment, you would stress these benefits in your promotional communication.
You apply S-T-P strategically when you consider each component when building a marketing plan. You apply it more directly when you implement the various strategies in your marketing activities. Part of the point of segmentation is to find the right media to connect with the audience. If you want to air a TV commercial, for instance, you need to know which channels and programs those customers watch. The more effectively and consistently you enact your S-T-P plan, the greater your ability to build brand loyalty among your customer base.