The STP Marketing Model can help you to analyze your product offering and the way you communicate its benefits and value to specific groups.
STP stands for:
The model is useful because it helps you to identify your most valuable types of customer, and then develop products and marketing messages tailored to them. This allows you to engage with each target group more effectively, personalize your messaging, and – ultimately – increase your sales.
Marriott International® owns a number of different hotel chains that target specific consumer groups.
It splits its hotel portfolios into five key groups, each designed to target a different sub-set of consumer:
As you can imagine, Marriott International doesn't communicate the same marketing message to all of its customers. Each hotel is designed and positioned to appeal to the unique wants and needs of a specific group.
Follow the steps below to apply the STP Model in your organization. For each step, we've also provided a worked example using the fictitious travel firm, the Adventure Travel Company.
Step 1: Segment Your Market
Your organization, product or brand can't be all things to all people. So, use market segmentation to divide your customers into groups of people with common characteristics and needs. This allows you to tailor your approach to meet each group's needs effectively, and gives you a huge advantage over competitors who use a "one size fits all" approach.
There are many different ways to segment your target markets:
The Adventure Travel Company is an online travel agency that organizes worldwide adventure vacations. It has split its customers into three segments, because it's too costly to create different packages for more groups than this:
Step 2: Target Your Best Customers
Next, you need to decide which segments to target by identifying the group that will offer the largest return and will be the most profitable. There are several factors to consider here:
The Adventure Travel Company analyzes the profits, revenue and market size of each of its segments. These are its findings:
So, it decides to focus on Segment A, after confirming that the segment size is big enough (it's estimated to be worth $220,000,000/year.)
Step 3: Position Your Offering
Finally, you need to identify how you should position your product to target the most valuable customer segments. Then, select the marketing mix that will be most effective for each of them.
Consider why customers should purchase your product rather than those of your competitors. Do this by identifying your unique selling proposition , and draw a positioning map to understand how each segment perceives your product, brand or service. This will help you determine how best to position your offering.
Also, look at the wants and needs of each segment. A good way to do this is by pinpointing the problem that your product solves for these people. Create a value proposition that clearly explains how your offering will meet this requirement better than any of your competitors' products, and then develop a marketing campaign that presents this value proposition in a way that your audience will appreciate.
The Adventure Travel Company markets itself as the "best eco-vacation service for young married couples" (Segment A).
It hosts a competition on Instagram® and Pinterest® to reach its desired market, because these are the channels that these target consumers tend to favor. It asks its followers on these channels to send in interesting pictures of past eco-vacations, and the best one wins an all-inclusive trip.
The campaign goes viral and thousands of people send in their photos, which helps build the Adventure Travel Company mailing list. The company then creates a monthly e-newsletter full of eco-vacation destination profiles.
The Segmentation, Targeting and Positioning (STP) Model helps you position a product or service to target different groups of customers more efficiently. STP stands for:
- Segment your market.
- Target your best consumers.
- Position your offering.
This three-step approach helps you quickly zoom in on the most profitable parts of your business, so that you can fully exploit the opportunities that they offer.
To use the model, start by segmenting your market into groups. Next, choose which of these you want to target. Last, identify how you want to position your product, based on the personality and behavior of your target market.