STP Strategies and Decision MakingHWA
STP strategies are so called because they represent a sequence of actions. These are Segmenting, Targeting and Positioning. These strategies are very much important in marketing as they determine the product of the company, the target market in which the product is released the positioning the product in the market. STP or Segmentation, Targeting and Positioning can be regarded as one of the best strategies for designing a product.
STP Strategies and Decision Making
Segmentation is one of the most primary activities of a company. If a company wants to introduce a new product, then the company needs to survey number of industries to look for a promising, potential market where they can introduce a new product. Segmentation consists of dividing the market on the basis of the segments such as gender, age, preferences, culture, education, etc. People falling into these groups are taken into consideration and products are designed to meet their specifications. For example, a video game console making company today, will take into consideration the age of the game players. The general age of gamers today is teenage and early to mid twenties. Most of the video games are also developed taking into consideration their interests.
Targeting is the next step in the process of design and decision making. In this process a product is designed, keeping in mind one ore more segments that were identified during the market segmentation. Target marketing differs from mass marketing. Mass marketing, as the name suggests, is intended to reach the whole population at large. But, target marketing is intended to reach the specific audience. In the above example of video games, teenagers and young people are often targeted. Most of these games are played by boys and the best way to attract teenage and adult men is through action oriented games which are violent. So, in the gaming segment, the general targets are teenagers and young people. Children and preteens also come under a segment. The games designed for children are not so violent and these games are generally based on their favorite movie or cartoon characters like Batman, Spiderman, Ironman, Hulk, Superman, etc.
Positioning is the next step in the process of STP decision making. It can be described as the process in which the target market is targeted. This is done through proper advertising. Advertising, as we know is the process of communicating to the customer. The purpose of an advertisement is fulfilled only when it has effectively communicated to the target audience. The purpose of positioning is to place the product in such a position where the product and its perceived uses are known to the customers.
These actions are sequential most of the time, but there exceptions for the sequences to take place in the correct order. There are some exceptions, for example, when Mountain Dew was launched for the first time, it was promoted as carbonated water. But, after a loosing battle with the giant in the industry, Coca-Cola, Mountain Dew took a new avatar by endorsing extreme sports. Only after taking up extreme sports as their mascot, they were able to succeed in the market. In the case of Mountain Dew, the target section was the young audience. This was only realized after loosing the battle and then again concentrating on the younger generation through extreme sports were they able to succeed.
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You can also refer to our older articles on Marketing which include Product Life Cycle, Market Analysis, Customer Relationship Management, Customer Lifetime Value