Question

What are the 5 steps that make up the segmentation, targeting and positioning process and how do they support the overall strategy?

Answer 1

Segmentation, targeting and positioning process or STP model helps in identifying the potential customers for the product and utilising the resources and strategies to sell the product to the customer to gain benefits from the marketing and selling process. The steps involved in the STP model are as follows:

- Establish overall strategies- The strategy in which the marketing has to be done are to be established. This depends on the product type, nature of business and market demands. The process of segmentation, targeting and positioning will depend on the strategies build in this step.

- Identify and describe the segments- segments of customers are identified and described in this step. This can include segments like geographic, demographic, psychographic, etc. They can be further divided into age, sex, income, social status, purchasing power and behaviour etc.

- evaluate the segment attractiveness- In this step, it is identified how each segment will respond to the product marketing, how reachable they can be, and ho substantial and profitable each segment is. This helps in building a target market in the next step.

- Select the target market- Once the segments are identified and evaluated, the target market is selected which means the segment that will be most profitable for the product is selected to be the target market and the marketing strategies are formed based on that segment only.

- develop a positioning strategy- This step will involve the process of positioning the brand in the target market. A strategy is built for effectively positioning the brand such that it is reachable and available to the target customers and persuades them to buy the product effectively.

The overall strategies of the organisation will include achieving the objectives and goals created by the company in the most efficient way. Its ultimate goal will be to bring profits and sustainable growth to the company. All resources and strategies are aligned to achieve this goal. STP model helps in positioning the product in the right market to the right customers. This helps in increasing sales in the most effeicnt way. The increased sales bring in maximum profits which supports the overall strategy of the business.