Segmentation, Targeting, and Positioning (STP) in Marketing Management

Introduction

Effective marketing begins with understanding the market, selecting the right customer segments, and crafting a unique value proposition. The STP model Segmentation, Targeting, and Positioning provides a framework for identifying and reaching the most relevant consumer groups.

Concept of STP

1. Segmentation – Dividing a broad market into distinct groups based on shared characteristics.

2. Targeting – Selecting the most valuable market segment(s) to focus on.

3. Positioning – Creating a brand identity that resonates with the target audience.

Levels of Market Segmentation

1. Mass Marketing – Broad-based marketing with minimal differentiation.

2. Segment Marketing – Targeting specific market groups with customized offerings.

3. Niche Marketing – Focusing on specialized consumer needs.

4. Micro-Marketing – Personalizing marketing at an individual level.

Basis for Segmenting Consumer Markets

Consumers can be segmented using various criteria:

• Demographic – Age, gender, income, education.

• Geographic – Urban vs. rural markets, regional preferences.

• Psychographic – Lifestyle, values, interests.

• Behavioral – Purchase habits, brand loyalty, readiness to buy.

Consumer Behavior: The Rise of Consumer Democracy

Consumers today are more informed, vocal, and empowered than ever before. Digital platforms enable them to share opinions, demand accountability, and shape brand perceptions.

Stimulus-Response Model of Consumer Behavior

Consumer decisions are influenced by external stimuli (advertising, promotions) and internal factors (personal needs, motivation). The model helps businesses understand how to trigger favorable responses.

Buyer Characteristics in the Indian Context

1. Cultural Influences – Tradition, family values, and collectivism affect purchasing behavior.

2. Social Factors – Peer influence, social status, and aspirational buying play crucial roles.

3. Personal Factors – Income, lifestyle, and occupation define preferences.

4. Psychological Drivers – Perception, motivation, learning, and attitudes shape decisions.

Consumer Buying Decision Process

1. Need Recognition – Identifying a requirement or problem.

2. Information Search – Gathering details about available options.

3. Evaluation of Alternatives – Comparing features, benefits, and risks.

4. Purchase Decision – Selecting the best solution.

5. Post-Purchase Behavior – Satisfaction, loyalty, or brand-switching.

Business Customer’s Buying Decision Process

Unlike individual consumers, businesses follow a structured process:

1. Problem Recognition

2. Supplier Search

3. Proposal Evaluation

4. Negotiation & Purchase Decision

5. Performance Review & Relationship Management

Traditional vs. Experiential Marketing’s View of Customers

• Traditional Marketing focuses on product features, pricing, and promotions.

• Experiential Marketing emphasizes emotional connection, personalized engagement, and brand storytelling.