Quick reference
Memory aid
Segment the market. Target the best segments. Position distinctively. Don't try to please everyone.
TL;DR
Divide the market into segments, select the most attractive ones to target, and create a distinctive positioning that resonates with those segments and differentiates from competitors.
What Is STP Marketing?
STP says: don't try to be everything to everyone. Instead, divide the market into groups with similar needs (Segment), pick the groups you can serve best (Target), and craft a message that resonates specifically with them (Position).
If you're talking to everybody, you're talking to nobody.
— Marketing axiom
Segmentation divides heterogeneous markets into homogeneous groups using variables like demographics, psychographics, behavior, and needs. Targeting evaluates each segment's attractiveness (size, growth, profitability, accessibility) and selects those that align with organizational strengths. Positioning creates a distinctive place in the target customers' minds relative to competitors. The positioning statement articulates: For [target], [brand] is the [category] that [key benefit] because [reason to believe].
STP Strategic Process
A three-stage sequential process from market analysis through to competitive positioning.
Segment
Divide the market
Target
Select best segments
Position
Differentiate offering
Origin & context
STP combines three ideas that developed separately: market segmentation (Wendell Smith, 1956), targeting, and positioning, which Jack Trout introduced in a 1969 article and Al Ries and Jack Trout popularized in their 1981 book Positioning: The Battle for Your Mind. Philip Kotler's marketing textbooks made segmentation, targeting, and positioning the standard sequence of modern marketing strategy.
Core Components
Segmentation
Dividing the market into distinct groups of customers with similar needs.
Example
The athletic shoe market segmented by: serious athletes (performance), casual exercisers (comfort), fashion-conscious (style), and budget-conscious (value).
Targeting
Evaluating segments and selecting which to serve.
Example
Nike primarily targets serious athletes and fashion-conscious consumers, leaving the budget segment to competitors.
Positioning
Creating a distinctive image and value proposition for the target segment.
Example
Volvo positions on safety. An illustrative positioning statement: 'For families who prioritize safety, Volvo is the car brand that protects what matters most because of 60+ years of safety innovation.'
Wendell Smith introduced the concept of market segmentation in 1956, arguing that markets are naturally heterogeneous. Before this, mass marketing treated all customers as identical — a single product for everyone. Smith's insight that different customer groups have different needs fundamentally changed marketing strategy.
When to Use STP Marketing
Market entry strategy
Problem it solves: Identifies the most attractive segment to target in a new market.
Real-world application
Tesla entered the auto market targeting affluent early adopters (segment) with a luxury electric sports car (positioning), then expanded to the mass market over time.
Brand repositioning
Problem it solves: Helps organizations redefine who they serve and how they're perceived.
Real-world application
Old Spice repositioned from an aftershave associated with older men to a young, humorous, aspirational brand — changing the target segment and positioning simultaneously.
The positioning statement is internal — it guides all marketing decisions. The tagline is external — what customers see. They should be aligned but the positioning statement is more detailed.
How to Apply STP Marketing: Step by Step
Before you start
- →Market research data
- →Customer insights
- →Competitive analysis
Segment
Divide the market using relevant variables.
Tips
- ✓Use behavioral and needs-based segmentation, not just demographics
Common mistakes
- ✗Segmenting only by demographics when behavior would be more actionable
Target
Evaluate each segment and select which to serve.
Tips
- ✓Assess: size, growth, profitability, competition, and your ability to serve
Common mistakes
- ✗Targeting too many segments, diluting focus and resources
Position
Craft a unique positioning for each target segment.
Tips
- ✓Use a perceptual map to visualize your position relative to competitors
Common mistakes
- ✗Positioning that is not differentiated — 'me too' positioning
Positioning is not what you do to a product. Positioning is what you do to the mind of the prospect.
— Al Ries & Jack Trout, Positioning: The Battle for Your Mind (1981)
Value & Outcomes
Primary benefit
Focuses marketing resources on the most attractive segments with a differentiated positioning.
Additional benefits
- ✓Prevents the 'everything to everyone' trap
- ✓Creates clear, defensible market positions
What you'll learn
- →How to segment markets effectively
- →How to create differentiated positioning
Typical outcomes
Best Practices
📋 Preparation
- •Invest in customer research before segmenting
- •Analyze competitor positioning
🚀 Execution
- •Segment by needs and behaviors, not just demographics
- •Position on benefits the customer cares about
🔄 Follow-Up
- •Validate positioning with target customers
- •Adjust as market dynamics evolve
💎 Pro Tips
- •The best positioning occupies a space that is valued by customers and difficult for competitors to claim
Coca-Cola's portfolio of more than 200 brands shows STP at work. Different brands are aimed at different segments: Coca-Cola for mainstream cola drinkers, Diet Coke for calorie-conscious adults, and smartwater for premium, health-oriented consumers.
Limitations & Pitfalls
Markets are messier than neat segments — boundaries are blurry
Mitigation: Use segments as guides, not rigid boxes
Positioning can become stale as markets and competitors evolve
Mitigation: Reassess positioning regularly against competitive changes
Where this comes fromPhilip Kotler (popularized) introduced this (1969).
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