It’s important to deliver your business’s message to the right audience. The STP marketing model is helpful in this case. Segmentation, targeting, and positioning are what STP stands for.
It’s a strategy that assists companies in identifying their most essential customers, focusing their marketing on these groups, and ensuring their brand stands out from competitors. The development process.
The first step in the STP strategy is segmentation. Segmentation involves dividing the overall market into smaller groups based on factors such as age, gender, tastes, and common preferences.
Customers with similar needs and behaviours should be grouped together.
A market segment is a part of the larger market that is likely to respond similarly to a specific event.
Segmentation helps the firm identify which types of customers to target for their goods or services.
Because of this, a business should carry out the segmentation process carefully. You can segment a market based on:
-Psychographic traits (lifestyle choices)
- STP marketing and entrepreneurial success
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-Geographic Attributes (where it is)
-Habits and other behavioural traits
-Demographics (age, sex, etc.)
-Once the organisation has finished dividing the market into segments, it can choose the best one for its goods and/or services.
When segmentation is done right, a business can focus on one or more categories without wasting time or money.
When the segmentation process is complete, Pan-African entrepreneurs will proceed to the second stage, known as targeting.
Market targeting involves analysing different market segments and selecting the most appropriate one to focus on.
It identifies who the ideal target audience is and the size of the target market to be reached.
In simple terms, it is the process of choosing the most suitable target audience for a product or service and excluding other groups that are not appropriate.
A company needs to conduct extensive research to identify its target audience; otherwise, it risks wasting time and money with minimal return on investment.
Typically, a new product or service is initially offered to a specific target market. If it performs well for them, the business then expands to other markets.
The size of the business also influences how it targets its market. The cost of targeting increases as the number of target markets grows.
The final stage is market positioning.
Positioning involves placing the product or service in the minds of the right buyers and making it appear more attractive than similar offerings.
Several factors influence the process of positioning, such as:
-It will be harder to place the product or service if the target market is bigger.
-The business might develop a completely new and different market positioning strategy if there is no competition.
-If the product already has a solid brand value, it will be easier for the corporation to position any new product or service.
-The business can gain a competitive advantage in the market by choosing to charge less for its goods or services than its rivals.
We explain the STP marketing process to the Pan African entrepreneurs step by step, as shown below:
Step 1: Define the market
The global market is large. You need to identify a niche to reach your audience effectively.
Consider factors like the total available market (TAM), the serviceable available market (SAM), and the serviceable obtainable market (SOM). These can help you determine the overall market size, the segment suitable for your product or service, and the portion you can realistically target.
Step 2: Map the targeted groups:
Now that you know who your market is, you can further segment it by factors like age, income, location, interests, lifestyle, and behaviour (such as how often they buy things or visit your website). The more you delve into these details, the more precise the different segments of your audience become.
Step 3: Create profiles for each segment:
There is a strategic need to create detailed profiles for each relevant market category. These should include their needs, behaviours, demographics, brand preferences, and shopping habits. This will help you compare them and select the most suitable ones for your marketing efforts.
Step 4: How attractive are the segments:
To assess how attractive different sectors are, compare the results of market research with customer studies. When considering these segments, it’s important to think about their size, growth rate, price sensitivity, and the level of commitment from their members to specific products or services. Identify the areas that have the best potential to yield the highest return on your investment (ROI).
Step 5: Choose your target audience(s):
Select the target audience(s) that best align with your business strategy and overall objectives based on your research and the appeal of each segment. Consider factors such as the size of the segment, the level of competition, and growth potential.
Step 6: Plan on how to position yourself:
Identify what makes your business unique in your field and what will attract the target audience for this message.
This can include, but is not limited to, offering a better alternative than current options (category-based), fulfilling specific customer needs or desires (consumer-based), providing something novel or different while being aware of competitors’ offerings (competitor-based), and highlighting the benefits customers will receive if they make a purchase (benefit-based).
Step 7: Select marketing mix:
The final step is to implement your STP marketing plan. Develop a “marketing mix” that aligns with your brand’s position and captures the attention of your target audience. Product (features, design, quality), price (pricing strategies, discounts), place (distribution channels), and promotion (marketing communications) are all elements of the marketing mix.
In conclusion, the STP marketing concept helps firms better understand and connect with their customers.
Businesses can distinguish themselves from competitors by dividing the market into smaller segments (Segmentation), focusing on the most significant groups (Targeting), and ensuring their products or services appeal to these groups (Positioning).
