For a company's marketing strategy to be effective in a market, it must divide the market into segments that work to its advantage, taking its own products and services into account. This is the STP theory of market segmentation.
Market segmentation means dividing a broad market into smaller markets with different characteristics.
Target market selection means evaluating each smaller market and choosing the best one based on the company's own characteristics and needs.
Market positioning means shaping how the company's products are presented within the selected market, running campaigns, providing value to customers, generating product sales, and earning returns from the market.
For businesses, mastering STP helps them explore new markets, make better use of limited resources in more valuable new markets, and develop more suitable marketing strategies for those markets. A market is like a vast mine with endless veins of ore. Once you choose the right angle of entry, you can use it to uncover new deposits. Many so-called new markets are really just new angles on old markets. STP is a powerful tool for finding new angles on a market and uncovering new veins of opportunity.
In STP, P—positioning—is only the starting point for marketing action. Add an action pathway after STP to achieve results from your market positioning.
This action pathway consists of two steps: Site, the marketing location, and Touch, reaching customers.
Marketing locations include both physical and virtual spaces. Once we have clarified our market positioning, we need to identify the physical places where our target audience often gathers, such as intersections, plazas, and cafés. We also need to find the virtual spaces they frequent, such as certain video, community, and shopping platforms. That is not enough: in these places, we also need to look for the topics and events they follow, as well as the walls and even specific chairs they gather around, creating opportunities to connect with them.
Customer engagement includes two types of connection: direct contact and emotional resonance. Direct contact involves hands-on experience with features and interactions with services, allowing customers to gain a deeper understanding of you. Emotional resonance means moving customers and connecting with them psychologically, spiritually, or emotionally, providing emotional value and fostering a favorable impression of you. Once place and engagement are incorporated, they combine with STP to form a new, complete model: STPST.
The essence of market segmentation is a process of categorizing, segmenting, and analyzing the subjects being studied—or the occupational groups in an industry you plan to pursue in the future.
The essence of target market selection is to draw conclusions from your analysis, identify a breakthrough opportunity, and choose the best point of entry.
The essence of market positioning is to draw on your own characteristics and strengths to find a relatively suitable, comfortable position with opportunities for growth within a more precisely defined context of relationships, departments, roles, and stages.
The essence of marketing place is to proactively approach your target or the key strategic decision-maker for a critical project and find an opportunity to make contact.
The essence of customer engagement is thorough preparation and planning. Once you successfully make contact, you need to put your strengths or prepared plans and ideas into action and showcase them, ultimately achieving your goal.
STBST is like a step-by-step framework for pursuing dreams, taking you from the abstract to the concrete and from discovery to realization.