Segmentation, targeting and positioning (STP) helps your marketing drive company growth and better customer outcomes.


Effective marketing can drive business revenue increases and expand your customer base. However, marketing can also fall flat when it is general and doesn’t address customer needs.

It feels counterintuitive at first. You may feel marketing to everyone is your best chance of attracting as many customers as possible, but the opposite is true.

Seventy-one per cent of consumers now expect companies to provide personalized interactions, according to the Next in Personalization 2021 Report from McKinsey. The report also notes that companies that grow faster derive 40 per cent more of their revenue from personalization than other companies.

How can you effectively provide these personalized interactions? Creating marketing strategies using the segmentation, targeting and positioning (STP) model will help you reach your target audiences and drive conversions.

What is STP in marketing?

Segmentation, targeting and positioning are three critical elements in effective marketing. The three-step STP model lets you deliver relevant messages to your audiences to create a more personalized marketing experience.

It divides your potential customers into groups based on needs and other characteristics, then assesses which groups are most valuable for you to target. These insights help you create deeply personal messaging to draw these audiences to your business and convert them to customers.

Why should STP be part of your marketing strategy?

Most companies need to market to be competitive. Consumers are exposed to a lot of marketing messages in a day and are likely to tune out anything that feels irrelevant. Messaging that feels personalized is more likely to stand out, giving you a better chance of communicating the benefits of your product to your audience.

Let’s look at the three steps in STP and why each helps you create marketing campaigns with more precision and better results.

1.     Segmentation

The first step is to look at the different characteristics of customers in your broader target market. Once you identify these differentiators, you can break your potential market into various customer groups based on similar characteristics.

Criteria you can use for segmenting your audience include:

  • geographic location;
  • demographic profile;
  • lifestyle and motivations; and
  • shopping behaviour and interactions with your brand.

If you find these segments are still large, you can layer the criteria to create groups more likely to have similar pain points and needs you can address.

For example, an athletic wear company might decide to go beyond marketing broadly to “anyone” and target women 30 to 40 years old who live in Ontario and regularly run outside. It could create an ad campaign to engage these customers and offer them information that feels personal and relevant.

As you segment your customers into groups, it becomes easier to focus on customer needs rather than features of the products you’re selling. This will help you craft messaging that resonates deeply within each segment and offers the essential information for those shoppers to make buying decisions.

2.     Targeting

In this step, the STP model helps you prioritize your marketing efforts. Consider the groups you created in the segmentation step and decide which segments are worth targeting with your marketing. You’ll want to invest the most resources in reaching the audiences that are most likely to offer a solid return.

To help assess each group, review data such as the lifetime value of these customers, the most effective channels to reach them and the cost of using those channels. An ideal audience would be customers you can reach easily with your marketing for a reasonably low cost and who are likely to buy from you.

3.     Positioning

This step is all about standing out from the competition. First, consider what you’ve learned about your target audiences in the first two steps and what might motivate them to shop with you instead of your competitors. Learning what they care most about can help you map out the best way to reach them.

Look for opportunities to highlight how your brand and products align with your target customers’ values and motivations. What does your target segment value? What can you offer these customers to help them feel aligned with your brand? Consider where your competitors may be missing the mark.

Following the STP marketing model, you can direct your marketing dollars to smaller, motivated customer segments and build marketing campaigns that drive results.

Key benefits of STP marketing

Strategies that improve efficiency and efficacy can significantly benefit organizations trying to make the most of their marketing budgets in competitive markets.

STP marketing empowers you to create campaigns most likely to bring you a positive return while building insights to help you grow your business with your best customers in mind.

STP marketing can provide:

  • Personalized, impactful marketing messages

Following the steps of the STP model puts the customer and their needs at the centre of your marketing strategy, helping you build relevant, memorable messaging that makes your customers feel seen and understood.

  • Better return on marketing investments

Prioritizing your most valuable customer segments can help you cut back on wasted spending, ensuring that every dollar you put into marketing has a higher chance of driving sales and long-term growth.

  • Improved data about your ideal marketing channels
    Getting specific about who you want to engage helps you refine your marketing tactics, so each decision is based on where your ideal customers show buying behaviour, not which channels seem trendy or popular at the moment.

  • Less waste of resources on irrelevant campaigns

Marketing costs your company time and money. When you devote your team’s talent to creating high-quality, impactful campaigns that drive results, you can let go of the stress caused by wasted spending. Successful marketing campaigns also help you pitch for increased budgets in the future.

  • Valuable insights into future product development
    The better you understand your core customer segments, the more insightful your decisions can be as you expand your product selection. STP is a smart way to grow your company over time and ensure you continue improving your offerings with your customers’ needs in mind.

  • A level playing field for marketers

Companies with modest marketing budgets often need help to compete with well-known brands. Letting go of the need to market to every audience on every channel can help small brands use laser focus to connect with customers in a meaningful way.

What’s the takeaway? Creating a broad marketing campaign to appeal to all audiences at once can backfire, leaving businesses with disappointing results. In contrast, carefully targeted marketing messages that address the unique needs of your most relevant audiences can be very compelling.

The segmentation-targeting-positioning steps in this model can help you engage your most valuable potential customers with personalized marketing that makes it easy for them to choose your company over others.

Need more clarity about targeting the right audiences? Book a free consultation with a Postmedia expert to discuss how to reach your most valuable customers and drive growth with your marketing.