The STP Process and its Role in Marketing Strategy

Hello again and welcome to another video from the Marketing Study Guide

In this video I'm going to have a look at the segmentation targeting and positioning process

that is foundational in marketing and how it connects to marketing strategy itself

My name is Jeff and I'm a long-term marketing lecturer and practitioner. This is just an overview of the segmentation process that I'm sure you're familiar with

We start with the overall customer base or the overall concerted of consumers. We then put

them into segments which are related groups of consumers based on some segmentation based something

relevant to a marketing activity or descriptor and then from those we pick one or more of those

to be our best target market so the ones we're going to follow we then build positioning and strategy

and a marketing mix around the needs of that target market and the goal is to improve our

overall business success okay just a recap of the letters s to

TDP, S stands for segmentation. That's where we're splitting up the overall customers or consumers into groups, related groups, creating segments

T is target market selection or sometimes called targeting, where we go through and say out of the segments we've constructed, that's the segment we're going to pursue and that becomes our target market

And that is a decision of where we're going to compete in the marketplace

B is how we're going to differentiate. So when we're thinking about what we're going to offer that target market, we want something

that's unique and different to our competitors and we want to bring something new to

the marketplace So that becomes how we going to compete And then finally our overall positioning how are we going to be seen by consumers relative to competition

So what are we going to stand out for? What are they going to know about our brand

Why would they buy us, etc. In some textbooks, I've linked these two here

They just say positioning because differentiation is typically a component of positioning

that some textbooks split out to be crystal clear for marketing students

Okay, so let's have a look at our main strategic questions. The first one is market segmentation

We go, okay, what market are we looking at? So we define what market we're actually competing in

So if we're a fast food or a takeaway food shop, we could make burgers

We could be in the burger market. We could be in healthy food

We could be in pizza. We can be in any combination of foods

And then we could go, we're in the restaurant part. We're going to do a restaurant

Or we're going to only home delivery. Or we're going to franchise

So depending on how we frame the market and what the business is all about

depends what set of consumers are looking at. because it's just local consumers, citywide, national, people who go out for food, people

who stay at home and get food delivered, people who buy ingredients and make their own food

So depending on how we constructed the business that will help us define the market And then with market segmentation we then split them up into groups those consumers and then eventually once we happy with those segments we will select one or more of those

segments to be our target market. And that becomes the question, the next question of where are we competing

So we're in this overall market and we're going to focus here. This is where we're going in

This is what we're targeting. This is where we're going to attack the market

This is where we think we'll have the most success. And then finally we need to bring that alive

How are we going to do that? Sure, as a group of customers there, they have needs, we've worked out what they are, how do we best meet those needs

There's already players in there, there's already competitors, they're already, those consumers

already buying product from somewhere else. So how do we go in there be different and how do we position our brand

What have you known about? Where do we stand out? What's our points of difference

So that becomes our how to compete. And these are our main strategic questions when it comes to marketing

Who are we going to get after? And how are we going to be successful

So the construction of the segmentation process is very important for that

So I've got the full nine steps that you would actually work through in real life

These are in many marketing textbooks. But we start off by defining the market

that we're going to compete in. And then we break it down to different types of consumers

in that market. And we then quickly check that we've done out segmentation

correctly using a evaluation criteria. And I got a separate video on that We then build information about these segments And we bring in information and everything we know about how they by how loyal they are who they deal with what media they watch what are their demographic characteristics etc

We build a story around them and a brand persona and we get a deep understanding of them

And then we can go through a series of questions or evaluation points to go, yep, out of that segment, good, good, not so good

and we go through a segment by segment to see how attractive they are then we go

this is the target market for us bangs is what we're going to go after the

positioning the differentiation the marketing makes the execution our products how it all folds out and then if necessary if we're not performing well we

review it and and repeat the process but as you can see even though it's a series

of steps segmenting the market it tells us so much where we're competing

why are we competing there because we've evaluated them. Who are they in detail

You know, and how are we going to be successful? What's the whole story

So without this process, we don't have a roadmap. We don't have a direction

So even though this typically appears in a chapter on segmentation or targeting

or something in the average textbook, it's actually a foundational part of our marketing strategy

and very, very helpful. Without this, it's very difficult to drive marketing forward in most organizations

Okay, that's the video. Hopefully that was helpful for you. I've got many other videos on segmentation, targeting, positioning

Please check them out and please subscribe to me on YouTube