A common method for defining a target market is STP, which stands for Segmentation, Targeting, and Positioning. The main advantage of the STP approach is that it forces you to focus on the customer rather than on the product.
First, you divide the overall market into segments of people with common characteristics and needs. You must select a segmentation approach that fits your needs. Four common approaches are:
- geographic segmentation ( country, region, state, province, etc.)
- demographic segmentation ( age, gender, education, occupation )
- behavioral (what they buy, how often, where, how they use the product)
- psychographics (lifestyle, hobbies, activities, opinions, values )
Once you have divided your audience into different segments, you’ll assess those segments in terms of size, the likelihood of purchasing your product, profitability, and reachability. Based on your assessment, you will select one or more segments to be your target market.
Positioning is what allows you to set your product or services apart from the competition in the minds of your target audience. It is about creating, for each of your target markets, a message and a marketing mix that is most likely to appeal to that audience
Interesting STP Links
YouTube Video: What is Segmentation, Targeting and Positioning – Learn Marketing with Stories
The Complete Guide to STP Marketing: Segmentation, Targeting & Positioning
Segmentation, Targeting and Positioning (STP) Model