STP Marketing Model

What is the STP model in marketing?

The STP marketing model, standing for Segmentation, Targeting, and Positioning, is a comprehensive strategy framework utilized by businesses to focus businesses effectively. By understanding and applying the STP model, companies can identify their most valuable customer segments, tailor their marketing messages, and position their products or services to meet the specific needs of their target audience. This introduction serves as a quick guide to the essentials of the STP marketing model.

STP Model in Marketing – Introducing This Powerful Tool

The STP marketing model is a strategic approach to modern marketing that enables companies to be more efficient and effective in their marketing strategies. It consists of three steps: Segmentation, Targeting, and Positioning. Each plays a crucial role in helping businesses understand and reach their ideal customers.

According to Philip Kotler, a leading marketing authority, the STP marketing helps marketers prioritize proposals and then develop and deliver personalized and relevant messages to engage with different audiences. This model is not only fundamental but also indispensable in creating different types of marketing strategies that deliver results. It aligns marketing messages and campaigns with the audience’s expectations and needs, based on predetermined segments.

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Segmentation – Divide and Conquer

Segmentation involves dividing a market into distinct groups of buyers who have different needs, characteristics, or behaviors, and who might require separate products or marketing mixes. The main types of market segmentation include:

Demographic Segmentation

This type involves segmenting the market based on variables such as age, gender, family size, income, occupation, education, religion, race, and nationality. For instance, a Pew Research Center study shows varying internet usage rates across different age groups, indicating the need for tailored digital marketing strategies to appeal to each demographic segment.

Psychographic Segmentation

Psychographic segmentation considers the psychological aspects of consumer behavior by studying consumers’ lifestyles, values, opinions, and interests. A report by the American Psychological Association can provide insights into how values influence consumer behaviour, which is crucial for developing targeted marketing strategies.

Behavioural Segmentation

Behavioural segmentation divides the market into groups based on consumer knowledge, attitudes, uses, or responses to a product. Many companies use behavioural data to tailor marketing campaigns to consumers who have shown interest in similar products or services.

Geographic Segmentation

This type of segmentation divides the market based on geographic criteria, such as cities, regions, countries, or international regions. Climate, culture, and language can significantly affect consumer behaviour and, therefore, marketing strategies.

Targeting – Know Who to Focus On

After segmenting the market, the next step is targeting. Targeting involves choosing a specific segment to target with your marketing. It involves evaluating each segment’s attractiveness and deciding which to invest resources in.

Factors include segment size, growth potential, competition, and compatibility with the organization’s objectives and resources. Marketing experts emphasize the importance of targeting the right audience. They use market segmentation data to concentrate marketing efforts on segments with high-profit potential and align product offerings with the segment’s preferences.

Positioning – The Most Important Step

Positioning is about defining how a product or service will be perceived by target customers. It involves creating a distinctive, clear, and desirable position relative to competing products. Effective positioning addresses customer needs and preferences and communicates a product’s unique benefits in a crowded market.

What Would Be an STP Model Example in Real Life?

By understanding and applying the STP model, companies can tailor their products and marketing efforts to meet the specific needs of distinct groups. This results in more efficient resource use and higher conversion rates.

Nike: Segmenting and Targeting Athletes

Nike, a global leader in athletic footwear, apparel, and equipment, has effectively utilized the STP marketing model to dominate the sports industry. The company segments its market based on several criteria, including demographic factors (age, gender), psychographic factors (lifestyle, sports interests), and geographic factors (urban vs. rural, regional preferences). For instance, Nike targets young athletes through products tailored for high-performance sports, leveraging high-profile endorsements and sport-specific campaigns.

Statistics show that Nike’s targeting strategy has proven effective. A significant portion of its revenue is generated from the athletic community. For example, Nike reported a substantial increase in sales after launching its innovative Nike Pro Hijab, which targets Muslim female athletes. This expanded its market reach and reinforced brand loyalty within this demographic group.

Tesla: Targeting the Eco-Conscious Consumer

Tesla’s marketing approach for electric vehicles (EVs) utilizes the STP model. It focuses on eco-conscious consumers interested in sustainability and advanced technology. By segmenting the market into environmentally aware and technologically savvy consumers, Tesla effectively targets a niche that appreciates innovation in renewable energy and automotive technology.

This targeting strategy is backed by statistics indicating a rising demand for electric vehicles among environmentally conscious consumers. According to the International Energy Agency, electric cars account for 18% of all cars in the world (4% more than in 2018 and 16% more than in 2018).

Amazon: Positioning for Every Consumer

Amazon’s use of the STP marketing model is a prime example of positioning a brand to appeal to virtually every consumer. Amazon segments its customers by a variety of behaviors, preferences, and demographic data. However, what truly sets Amazon apart is its positioning as the “everything store” that is not only a retailer but also a technology innovator with its consumer electronics and cloud computing services.

According to data from Similarweb, Amazon is the most visited e-commerce site, with 2.7 billion monthly visits in January 2025. The company’s ability to position itself as a one-stop shop for convenience, variety, and competitive pricing has been a key factor in its success.

Starbucks: Creating a ‘Third Place’

Starbucks excels in positioning by creating an experience around its coffee, which is termed as offering a “third place” between home and work for its customers. The company’s market segmentation targets urban professionals between the ages of 25 and 40 who are willing to pay a premium for coffee as a lifestyle accessory.

Starbucks targets this demographic with its strategic store locations, ambient store design, and product offerings that enhance the customer experience. The effectiveness of Starbucks’ positioning is evident in its global store expansion and revenue growth, particularly in urban centers worldwide.

Apple: Premium Positioning in Technology

Apple’s use of the STP model focuses on consumers who seek high-quality, innovative tech products. By positioning itself as a premium brand, Apple attracts tech enthusiasts who are willing to pay higher prices for the latest advancements in technology, style, and performance. Apple segments its consumers by lifestyle, income, and a desire for high-status products, targeting them with sleek product designs and cutting-edge technology.

This strategy has been highly successful, with Apple consistently maintaining high-profit margins and customer loyalty rates. For example, Apple’s market capitalization and revenue statistics, available through its Investor Relations page, demonstrate the success of its premium positioning strategy (Apple Investor Relations).

Examining these examples reveals that the STP marketing model is a powerful tool for marketers to effectively reach and engage their target audiences. Each company has tailored its approach to meet the specific needs and preferences of its customer segments, leading to remarkable commercial success.

How to Implement the STP Marketing in Your Business?

Implementing STP marketing involves several practical steps. First, conduct thorough market research to identify and understand potential segments. You can read more about this topic in our e-book Market Research Explained and become an expert in this field!

Next, evaluate the attractiveness of each segment and decide on the target market. Then, develop positioning strategies for each targeted segment.

Finally, integrate the STP approach into your marketing plan to ensure that all activities, from product development to promotions, align with the segmentation, targeting, and positioning strategy. Tools such as Google Analytics and social media insights can provide valuable data for this process, helping to track the effectiveness of your STP strategies and make necessary adjustments.

By following these steps, businesses can use the STP marketing model to refine their marketing strategies, better meet the needs of their target customers, and enhance overall business performance.