What Is STP Marketing & How Can it Benefit your Business?

What Is STP Marketing & How Can it Benefit your Business?

What exactly is STP marketing? And what is its role in increasing revenue and conversions?

In this article, we will look at the Segmentation and Targeting framework, illustrated with real-world examples.

Segmentation targeting positioning marketing is a fundamental idea in modern-day advertising.

Without it, strategies are generic, with very little or no personalisation, and would ultimately not be able to transform to the degree that most companies consider to be efficient.

Let's look into the details of this STP Model and see how applying this framework to your e-commerce company can produce amazing outcomes.

What exactly is STP marketing?

STP Marketing is an acronym for segmentationtargeting, and positioning. This three-step process examines your product or services and how you communicate their benefits to specific client segments.

In a nutshell, the STP marketing approach is to divide your market to target certain customers with campaigns tailored to their needs and preferences.

STP marketing is successful because it focuses on breaking down your client base into smaller segments, allowing you to create precise marketing strategies to reach and engage every intended group of customers.

In reality, 59% of customers claim the idea of personalisation influences their shopping purchases. 44% said that a more personalised shopping experience would encourage them to become regular customers of a particular brand.

STP marketing is transitioning from product-oriented marketing in favour of a focus on the customer. This change gives businesses the chance to gain a more thorough understanding of the type of people they want to attract and the best way to connect with them.

In essence, the more personalised and targeted your marketing strategies will be, the more successful you'll be.

The STEP Formula

If you're searching for an easy way to keep track of and understand STP's key concepts, the acronym STEP is a great choice.

STEP can be extremely helpful:

Segmentation + Targeting Equals Positioning

This formula clearly shows the need for each segment to have a customised positioning and a marketing strategy to ensure it is successful.

Let's examine all three stages of this STP Marketing Model:


The initial step in this STP market model involves segmentation. The goal here is to make different customer segments based on certain parameters and characteristics you decide to use.

The four major kinds that comprise segments for your audience are:

Segmentation of geographic areas: Dividing your audience into countries, provinces, states, regions, and so on.

Demographic segmentation: Segmenting your target audience according to gender, age, educational level, or occupation.

Behaviour segmentation: Segmenting your target audience according to their interactions with your website, including how often items are browsed, and what exactly they purchase (etc.)​​​​​​​​​​​​​​

​​​​​​​Psychological segmentation: Separating your target audience according to "who" your potential customer is: their lifestyle, interests and activities, beliefs, and so on.


Step 2 is the second step of what the STP marketing model is to target.

The goal here is to examine the segments you've made before and decide which segments are most likely to bring about the desirable results (depending on the marketing strategy, these could be anything from product sales up to tiny conversions such as email sign-ups).

Your ideal target market should be continuously expanding, profitable, and affordable acquisition costs:​​​​​​​

Size: Consider the size of your segment and the potential growth it could have in the future.​​​​​​​

Profitability: Take note of which segments of your customers would be willing to invest the most money in your services or products. Find out the value over the life of each segment's customers and evaluate.​​​​​​​

​​​​​​​Reachability: Consider how simple or challenging it will be to reach each segment through the marketing strategies you employ. Think about the costs of customer acquisition (CACs) for every segment. A higher CAC is associated with lower profit.

There are many things to consider when choosing the right audience to target. We'll go over several more later and make sure every aspect you take into consideration is in line with your intended customer and their preferences.


The last step of this strategy is positioning, which helps you elevate your services or products above the competition to your prospective customers. Many businesses offer similar products to yours, and you have to figure out what distinguishes you from the competition.

The various factors you considered during the first two steps should have made it easier to pinpoint your area of expertise. Three factors define your positioning and can give you an edge in your market:

The symbol of positioning 

Improves the self-image/belongingness or even the egos of your clients. The industry of luxury cars is an excellent example of this. They have the same function as any other vehicle but also enhance their customers' perception/image of themselves.​​​​​​​

Functional positioning

Help your client solve their issue and offer them real advantages.​​​​​​​

Experience-based positioning: 

Pay attention to the emotional connections customers feel with your products, services or brand.

The most effective product positioning results from a combination of the three aspects. One method of visualising the above three factors is by making the perception map of your industry. Make sure you focus on the things that are important to your customers and determine the places you and your competition are located on the maps.

The benefits of STP marketing

If you're still not certain that STP marketing will transform your company, here's a breakdown of the main advantages of STP marketing over traditional marketing methods.

Since STP concentrates on identifying a specific market and positioning your products or services in a manner most likely to attract this group, your marketing is hyper-personalised.

Personalised marketing:

  • Your branding message gets more personal and human since you've got your customer personas and know precisely who you're speaking to.
  • Your marketing strategy is more precise and will yield a greater ROI because you're not wasting money on channels that your target audience doesn't care about.
  • Your studies on the market and innovations in your product are more efficient because you know precisely who to contact for advice and feedback during the development phase.

Yieldify's latest research has shown that e-commerce executives are taking personalisation to the next level at an unprecedented rate. 74% of e-commerce sites now claim to have taken on personalisation strategies. What are their motives?

Personalisation was found to be a factor in 58% of the cases. To increase customer retention, 55% mentioned conversion, and 45% discovered that personalisation reduced costs associated with new customer acquisition. 

STP lets small companies and new businesses succeed within their particular niches when they typically wouldn't be able to compete with larger companies that are part of the whole market sector.

STP Marketing examples: The Cola Wars

STP marketing has been in use for a long time and has proven to be incredibly effective.

Let’s take a look at an actual case of STP marketing to understand how it has succeeded in increasing revenues and conversions.

In the 1980s, when Pepsi-Cola tried to steal some market share it had gained from Coca-Cola, Pepsi used segmentation to target specific key groups. They concentrated on the orientation and loyalty segmentation strategy and split markets into three different consumer segments:

  1. Consumers who had a positive view toward Coke, and were completely committed to the Coke brand.
  2. Consumers who had a positive view towards both Coke and Pepsi, but were completely committed to Coke.
  3. Consumers who are positive about both brands, loyal to both brands, and switched between the two.

Pepsi has always concentrated its marketing efforts around the third category because it was the most appealing and offered the highest ROI.

Concentrating on Coke's loyal customers was seen as unproductive in terms of time and money because they were not likely to alter their buying behaviour.

STP marketing is a fascinating field that allows brands to increase sales by defining specific target markets. It avoids unnecessary expenditure (in terms of advertising to the entire market) and allows small-sized businesses to achieve success in niche markets.

Looking for support with you STP marketing strategy? Contact EWM today.



Call us