STP STRATEGIES

SHWETANSHU GUPTA (49)

ARJUN GUPTA (09)
SIDHARTH GUPTA (50)

STP
The STP process is an important concept in the study and application
of marketing. The letters STP stand for segmentation, targeting,
and positioning.
The STP process demonstrates the links between an overall market
and how a company chooses to compete in that market. The goal of
the STP process is to guide the organization to the development and
implementation of an appropriate marketing mix, as highlighted in
the following diagram.

STP

Marketing
Mix

Importance of Segmentation &

Targeting
Helps distinguish one customer group from another within a given
market.
Facilitates proper choice of target market
Facilitate effective tapping of market.
Helps divide the market and in conquering them.
Makes marketing efforts more efficient and economic
Helps to spot less satisfied segments and succeed by satisfying such
segments.
When segmentation reaches high sophistication, companies and
customers can choose each other and stay together.
Helps crystallize the needs of target market and ellicit more
predictable responses from them.

Segmentation

Segmentation as a process consists of segment identification,

segment selection and the creation of marketing mixes for
target segments.

The outcome of the segmentation process should yield "true

market segments" which meet three criteria: (a) Group identity:
true segments must be groupings that are homogeneous within
segments and heterogeneous across groups. (b) Systematic
behaviors: a true segment must meet the practical requirement
of reacting similarly to a particular marketing mix. (c) The third
criteria refers to efficiency potential in terms of feasibility and
cost of reaching a segment (

Segmentation strategies
In the undifferentiated strategy, all consumers are
treated as the same, with firms not making any specific
efforts to satisfy particular groups. This may work when
the product is a standard one where one competitor
really cant offer much that another one cant. Usually,
this is the case only for commodities .

In the concentrated strategy, one firm chooses to focus

on one of several segments that exist while leaving
other segments to competitors. For example,
Southwest Airlines focuses on price sensitive
consumers who will forego meals and assigned seating
for low prices.

 In contrast, most airlines follow the differentiated

strategy: They offer high priced tickets to those
who are inflexible in that they cannot tell in
advance when they need to fly and find it
impractical to stay over a Saturday. These
travelersusually business travelerspay high
fares but can only fill the planes up partially. The
same airlines then sell some of the remaining
seats to more price sensitive customers who can
buy two weeks in advance and stay over.

Bases for Segmentation

Base(s) represents the core attributes of a group
existing or potential customers.
Consumers characteristics are divided into two criteria:
Facts , which can be determined from direct
questioning versus Cognitions , which are abstract
& can be determined only by complex questioning.
Consumer rooted features arising out of social,
physical & psychological characteristics versus
consumption-specific usage behaviors or attitude
and preference towards specific products or
buying situations

Bases for Segmentation

Consumer rooted segmentation

bases
Age, Gender, Marital Status,
Family life cycle, Income,
education and Occupation
Geography and Demographics
Geography and
Demographics
VALS (Values and
Lifestyles)
Culture, SubCulture, Indian
Culture and Cross
culture

Demographic Segmentation

Age
Kids: Amul Kool, chocolate milk
Youth: Amul Kool Kafe
Women and adults: Amul Calci+

Gender

Marital status
Market segmentation can also be as per the marital
status of the individuals. Travel agencies would not
have similar holiday packages for bachelors and
married couples.

Education
Market can be segmented on the basis of education
matriculation or less, under graduates, graduates,
post-graduation, etc. Most studies show that the
highly educated people spend more than the poorly
educated in respect of housing, clothing, recreation,

Age and stage of family life

cycle
Consumers wants and abilities change with age.
On the basis of age, a market can be divided into
four parts viz., children, young, adults and old.
For the consumers belonging to the different age
groups, different types of products are produced.
For instance, Pepsodent kids is for children while
Pepsodent Gum Care is for adults.

Income

Buying patterns depends on income of the consumers. No

two individuals or families spend money in exactly the
same way. If a researcher knows a persons income, he
can predict with some accuracy wants and needs of that
person and how those wants are likely to be satisfied.
Pantaloon, Shoppers stop target the high income group
as Big bazaar who cater to the individuals belonging to
the lower income segment.

Education
Market can be segmented on the basis of education
matriculation or less, under graduates, graduates,
post-graduation, etc. Most studies show that the
highly educated people spend more than the poorly
educated in respect of housing, clothing, recreation,
etc.

Occupation
A beach house shirt or a
funky T Shirt would
have no takers in a
Zodiac Store as it caters
specifically to the

Geodemographic segmentation

Geodemographic segmentation combines geographical and

demographic segmentation.
Geographic segmentation usually involves dividing up
geographic markets by using existing political boundaries,
natural climatic zones, or population boundaries.
For example, Bennett, Coleman and Co. Ltd divided
markets according to geographical units for their tabloids.
In Bangalore, the tabloid is known as Bangalore Mirror
where as it is Mumbai Mirror in Mumbai.

Psychological factors
Motivation
Motivation is what stimulates all
human behavior.
It is very important for the
marketers to know the motives
influencing the consumer as they
initiate and direct all human
behavior.
Abraham Maslow tried to arrange
such significant needs into a
hierarchy of five levels, depending
on the relative importance of the
needs to a person. The five levels
of needs given by him are 1)
physiological needs, 2) safety
needs, 3) social needs, 4) egoistic

Personality traits
WhenMarketers use personality variables to segment
the markets, they endow their products with brand
personality that corresponds to consumer personalities.
For example, Raymond advertises its fabrics with the tag
The Complete Man.
Parker Pens use Amitabh Bachchan as their brand
ambassador to project it as a status symbol.

Lifestyle

VALS (Values and Lifestyles)

INNOVAT
ORS

THINKER
S

High resource and high innovation people.

Successful, sophisticated, high self
esteem.
Most receptive to new ideas and
technologies
Motivated by ideals: high resources
Well educated, favor durability,
functionality and value in products

BELIEVER
S

ACHIEVE
RS

Motivated by Ideals: low resources

Strongly traditional, respect rule &
authority
Conservative, slow to change, technology
averse
Choose familiar products & established
Motivated
brands
by achievement: high resources
Goal oriented lifestyles that center on
family & career
Avoid changes: Prefer premium products

STRIVER
S

Motivated by achievement: low resources

Trendy and fun-loving: little income, tend to
have narrow interests: Favor stylish products

EXPERIENC
ERS

MAKERS

SURVIV
ORS

Motivated by self-expression: high

resources
Appreciate the unconventional: are active
& impulsive: Spend high proportion of
income on fashion, socializing and
entertainment
Motivated by self-expression: low
resources
Value practicality and self sufficiency
Spend leisure time with family and close
friends: prefer value to luxury and buy
basic products.
High innovation and high resource: Lead
narrowly focused lives: Primarily concerned
about safety and security
Tend to be brand loyal and buy discounted
merchandise

Sociocultural values and beliefs

Social class and cultural factors affect consumer buying
behavior.
Social groups include: family, friends, peers, colleagues.
Culture influence consumer behavior deeply. A given culture
brings its own unique pattern of social conduct. A person
usually acquire his cultural attributes right at his childhood.
Culture includes religion, caste, language, social behavior.
Example: Mc Donald dont offer beef
products in India and in Saudi Arabia
Mc Donald outlets include separate
dining sections for both men& women.

Social Class

Buying behaviour is reflected by the

influence of social class to which the
consumers belong. The social class can
be segmented as lower -lower, middlelower, upper-lower, lower-middle, middlemiddle, upper-middle, lower-upper,
middle-upper and upper-upper. Firms
dealing in clothing, home furnishing,
automobiles, etc. can design products for

Consumption specific segmentation

bases
Heavy, Medium, Light, Nonusers
Frequently, Occasionally,
Regularly
Functional, value for
money, social, positive
& negative emotional
Behavior and attitude

Usage rate

Consumers are divided on the basis of usage rate: heavy users, light
users, medium users and non users (prospective adopters or persistent
non adapters).
For example about 25% of all beer drinkers account for 75% of all beer
consumed. Therefore most beer companies focus on those 75% of beer
consumers.
Besides usage rate consumers can also be segmented on the basis of
awareness status and also level of involvement: awareness of product,
readiness to buy the product, unawareness and involvement in product.
Alan Paine textile brand, offered 4 cotton trousers for Rs. 999. Here, the
Company is interested in getting profits from sales volume rather than its
selling price.

Usage situation
Occasion or situation often determines what
consumers will purchase or consume.
Under different occasions or situations same
consumer might make different choices.
For example Diamond industry promotes
Diamond ring as an engagement symbol.

Benefit segmentation
Functional benefits
Value for money
Social benefits

Positive emotional benefit

Negative emotional
benefit

Peter England, a Madhura garment brand positioned its

wrinkle free trousers on the basis of benefits.

Colgate cavity protection range position itself as a

product to protect teeth against cavity.

Brand loyalty
Loyalty: if companies can identify customer loyalty to
theirbrand, and then delineate other characteristics these
people have in common, they will locate the idealtarget market.

User readiness stage

Stage of readiness: potential customers may be
unaware, aware, informed, interested, desirous, and
intending to buy. If a marketing manager is aware of
where the specific segment of potential customers is,
he or she can design the appropriate market strategy
to move them through the various stages of readiness.

Targeting
A target market refers to a group of individuals who are
inclined towards similar products and respond to similar
marketing techniques and promotional schemes.
Kelloggs K Special mainly targets individuals who want to cut
down on their calorie intake. The target market in such a case
would be individuals who are obese. The strategies designed
to promote K Special would not be the same in case of any
other brand say Complan or Boost which majorly cater to
teenagers and kids to help them in their overall development.
The target market for Kelloggs K Special would absolutely be
different from Boost or Complan.

Criteria for effective Targeting

Identifiable: Target market segment

should have same characteristics that are
relevant to the product/service.
Characteristics make it easier to identify
the target market.
Sizeable: In order to be a viable market,
segment should consist of enough
customers to make targeting profitable.

 Stable: Marketer prefer to target

consumer segments that are relatively
stable in terms of lifestyles and
consumption patterns and avoid fickle
segments that are unpredictable.
Accessible: To be targeted a segment
must be accessible, which means
marketers must be able to reach that
market segment in an economical way.

Strategies
Behavioral Targeting

Behavioral targeting comprises a range of technologies and techniques used by

online website publishers and advertisers aimed at increasing the effectiveness of
advertising using user web-browsing behavior information. In particular,
"behavioral targeting uses information collected from an individuals webbrowsing behavior to select advertisements to display".

When a consumer visits a web site, the pages they visit, the amount of time they
view each page, the links they click on, the searches they make and the things that
they interact with, allow sites to collect that data, and other factors, create a
'profile' that links to that visitor's web browser. As a result, site publishers can use
this data to create defined audience segments based upon visitors that have similar
profiles.

When visitors return to a specific site or a network of sites using the same web
browser, those profiles can be used to allow advertisers to position their online ads
in front of those visitors who exhibit a greater level of interest and intent for the
products and services being offered.

Micro Targeting
It is aggregating individual consumers into relatively small
groups, based on data available on them from diff
databases and targeting them with tailor made messages.
Data sources of micro-targeting include virtually any piece
of information available- voting records, residence and
address change, tax records, media exposure, feedbacks,
credit card records and much more.
Individual messages are then transmitted via
narrowcasting- using e-mails, mobile devices and even
door to door presentation on small screens to deliver
personalized messages to individuals

Concentrated Vs Differentiated
Marketing
A differentiated marketing strategy is when a company
creates campaigns that appeal to at least two market
segments or target groups. For example, a store can
promote a sale that appeals to people in at least two cities
or locations, or a company can market a product that
appeals to women in at least two age groups.
A concentrated marketing strategy is targeted to one
specific market segment or audience. For example, a
company might market a product specifically for teenage
girls, or a retailer might market his business to residents in
a specific town. Concentrated marketing strategies are
often geared for smaller groups of people, because they are
designed to appeal to a specific segment.

Counter-segmentation
Sometimes marketers adopt too
many micro segments, which later
become redundant. In such a case,
all segments are clubbed together
with a single marketing mix (counter
segmentation).

Positioning
Positioning is developing a product and brand image in
the minds of consumers. It can also include improving
a customer's perception about the experience they will
have if they choose to purchase your product or
service. The business can positively influence the
perceptions of its chosen customer base through
strategic promotional activities and by carefully
defining your business' marketing mix.
Effective positioning involves a good understanding of
competing products and the benefits that are sought
by your target market. It also requires you to identify a
differential advantage with which it will deliver the
required benefits to the market effectively against the
competition. Business should aim to define themselves
in the eyes of their customers in regards to their

PRACTICAL EXAMPLES

MAGGI INDIA
NESTLE introduced Maggi brand in INDIA in 1982.
With the launch of Maggi noodles, NUL created a new food category
in Indian packaged food market.
Over in India, Maggi became a popular snack food product.
In fact, "Maggi" has become a generalized name for instant noodles
in India and Malaysia.

Segmentation
Segmented the market on the basis of
lifestyle and eating habits of the Indian
consumer.
Focus mainly on age and appetite of the
urban families.

Target
Target audience are
kids
Youth
Working women
It helps mothers with the promise of fast
to cook and good to eat snacks.
convenience savvy time
misers

Position
Positioned their product with the well
known slogan
2minute noodles
taste bhi health bhi
Easy to cook, good to eat
Positioned their product as
to get fast relief from hunger.

Apple Iphone

Segment
Target Group

Positioning

Stylish and smart touch phones

Urban young from middle and
upper class
Device which is helps in
communication and also serves as
an entertainment device