What is the STP Model in Marketing?
The STP Model is one of the most commonly used models by companies in the markets before selling their products or services in the markets to be enjoyed by the customers. The STP Model or method consists of three main components or elements which are Segmentation, Targeting and Positioning. Despite the fact that the STP Model is very commonly used by companies, students enrolled in different courses, studying about the STP process often find themselves confused with regards to the manner in which the process can be applied by companies and organizations to gain benefit. Hence, we are discussing the STP model and explaining the application of the model for the purpose of better understanding of the students.
As stated, the STP process or model includes three main elements or concepts, which are Segmentation, Targeting and Positioning. The process of Segmentation means the segregation or division of the market in different segments which are measurable and accessible, wherein such segmentation can be done by using a number of criteria such as –
- The demographics of the market
- The socio-economic conditions of the consumers in the market
- The behavioral characteristics of the consumers in the market
- The psychographic characteristics of the consumers in the market, etc.
The process of Segmentation is based on the premise that a single product of an organization cannot fit and satisfy the needs of all the consumers. Hence, it is essential for an organization to recognize the segment of customers whose needs can be satisfied by the organization by providing particular products and services. It is also necessary to segment the customers because and organization, on the basis of such segmentation can introduce and customize their product and services to satisfy the needs of each segment. For example, an automobile company can segment its customers on the basis of their income and produce cars that suit the budget needs of each of the segments.
The next step of the STP Model is Targeting which refers to the process wherein the organization targets or chooses a segment as differentiated in the previous stage, to be able to promote its products and services in the market by making use of effective marketing techniques and strategies. The choice of targeting a particular segment at a time can often be a tough choice for an organization but most organizations look into possibility of gaining profits from each of the segments and compare the profitability ratio and hence making the choice that ticks all requirements of the growth and progress of the organization through the process. For example, if the three segments of an organization, A, B and C, as analyzed by it, generate a revenue of $200,000, $400,000 and $800,000 respectively, it is more likely for the organization to choose the Segment C to target because it is capable of generating more revenue for the company.
Finally, the last step of the STP process is Positioning, which in the simplest terms can be defined as the process through which the organization implements the targeting of the chosen segment in order to achieve the desired results. In the process of positioning, an organization makes decisions and strategies through which it can position itself and its products and services in the market. The main aim and the impact of the process of positioning is to create the a perception amongst the customer segment in the market on the basis of which they engage into the products and services being offered by the organization. The process of positioning involves the organizations to create marketing strategies that they are likely to use in order to promote their products and services in the market and increase their sales and revenues and requires the organization to look up at various factors that are likely to impact their positioning process such as the products being offered by the competitors in the market or the prices at which they are being offered to the customers, the possible effectiveness of the marketing plan, etc. Almost all organizations categorize the 4Ps of Marketing Mix to establish their positioning on the markets.
The STP Process is an absolutely essential process for any business organization, dealing in any range of products or services because they are important for the creation of the correct and efficient marketing strategies for organizations to implement in the markets. The STP process is often a part of the various assignments allotted to students in marketing courses and programs and is often found as difficult for them to understand or apply in case studies or business plans. Hence, online assignment services are used by most students to gain expert and excellent marketing assignment writing help to get good scores. You can easily get your online marketing assignments made from Makemyassignments.com which are offered with great quality and at low prices.
