The Marketer's Guide to

Segmentation, Targeting, &

Positioning (STP Marketing)
Allie Decker December 09, 2021

I once heard a new business owner define their target market as …

wait for it … “everyone”.

*cringe*

While it’s nice to believe that everyone would be interested in

purchasing your product or service, it’s not wise to define your target
market as such.

Not only does this definition (or lack thereof) create way more work
for you; it also does a disservice to your actual target market — by
over-widening your scope, you fail to inform and educate your
audience about how your product or service can improve their lives.

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This is where segmentation, targeting, and positioning come into

play. We developed this guide to help you understand how and why
you should invest time into better understanding your audience and
targeting your marketing. Let’s dive in.

Segmentation, targeting, and positioning (often referred to as

segmentation-targeting-positioning or STP marketing) is a
consumer-centric approach to marketing communications. The STP
model helps deliver more relevant, personalized messages to target
audiences.

At its core, STP marketing helps you to better target your marketing
messages and better serve your customer base.

The model can also reveal niche markets, uncover new customer or
market opportunities, ultimately making your marketing efforts more
efficient and cost-effective.

Conducting an STP Marketing Analysis

STP allows you to take a large, anonymous audience and define how
your different products (or different components of the same
product) relate to specific consumer segments within that larger
audience — thus understanding how to position your product(s) and
messaging to grab the attention of each segment.

Let’s unpack each part of the segmentation-targeting-positioning

model.
1. Segmentation

Segmentation refers to the process of dividing your audience into

smaller groups based on certain characteristics. This process allows
you to group your individual audience members into similar groups
so you can better communicate your products, features, and benefits
that may be most relevant to them.

You can segment your audience based on one or more of these

criteria:

Demographics, which typically answer the question of who

your buyer is (e.g. age, gender, education, location, and
profession)
Psychographics, which answer the question of why your buyer
buys (e.g. priorities, personality traits, and beliefs and values)
Lifestyle traits, such as hobbies, entertainment preferences,
and non-work activities
 Behavior, such as brand loyalty, channel preferences, and other
shopping habits

Segmentation may sound a little familiar to another process we often

discuss here on the HubSpot blog — creating buyer personas. The
two are very similar as they help you drill down the most important
factors in your target audience.

But where buyer personas help you create a handful of customer

profiles that represent your broader audience, segmentation allows
you to split your audience into countless groups, each of which you
can uniquely target.

For example, let’s say Paws & Tails is a Chicago pet-sitting company
that offers pet-sitting, dog walking, and boarding services. Given the
vast number of pet owners in the city, they need to segment their
audience into smaller groups to better understand how to position
their services.

Based on their research and current customer base, they split their
audience into three main segments:

Segment A is made up of high-income pet owners who work

often and need daytime dog walking and pet pop-in visits.
Segment B is made up of middle-class individuals and families
who travel and need overnight boarding or pet-sitting services.
Segment C is made up of older pet owners and retirees who
need help caring for their pets.

2. Targeting

With your audience segments in hand, it’s time to move on to the

targeting phase. First, however, you must decide which segments are
worth targeting with your marketing. To decipher this, ask yourself
some questions about each segment:

Is this segment composed of enough potential customers to

justify targeting? Would it yield enough profits if the segment
were to convert?
Is it measurably different from the other segments?
Is it accessible by all members of Marketing and Sales?
Is your company equipped and able to serve the segment? Are
there any physical, legal, social, or technological barriers that
could prevent that?

Choosing what segments to target is a strategic decision. Thankfully,

certain strategic planning models like the PESTLE analysis can help
you better understand the viability of each segment.

It takes a lot of work to successfully target a segment of your

audience. Whether you’ve identified two segments or ten, don’t feel
the need to target more than one segment at once. Plus — targeting
one at a time will help you better position your marketing for each
specific segment.

Following our example from before, Paws & Tails conducts research
to better understand its Chicago audience. Paws & Tails finds that
Segment A makes up 60% of its market size, Segment B makes up
30%, and Segment C makes up 10%. Moreover, Segment A has a
higher average income and is willing to pay more for pet-sitting and
walking services. Because of this, they choose to focus on Segment
A.

3. Positioning
At this point, you should understand the demographics,
psychographics, motivations, and pain points of the segments you’ve
chosen to target, which can provide a place to start when it comes to
positioning your product or service.

First, take a step back and examine your product or service through
the perspective of your chosen segment. If you were in their shoes,
why would you choose your product over a competitor’s? What
features or benefits are most relevant to you, based on the
motivations and pain points you’ve identified?

This information is important to defining your brand positioning and

understanding how it stacks up next to your competitors. One way to
understand where you, well, stand is by building a positioning map,
which is “the visual plotting of specific brands against axes, where
each axis represents an attribute that is known to drive brand
selection.”
The segment you choose to target should dictate what two
attributes you plot on your positioning map. For example, let’s say
Paws & Tails decides Segment A selects pet-sitting brands based on
two attributes: service area and reliability.

By understanding 1) what the target segment deems most important

for brand selection and 2) where its competitors succeed (and fall
short), Paws & Tails is able to identify an open market opportunity
and position its marketing to best fit the needs and goals of its
audience.

Using Segmentation, Targeting, and

Positioning in Marketing
The STP model is a priceless addition to any marketing strategy,
regardless of your industry, product, or audience. It prioritizes
efficient and effective marketing and ensures you’re delivering only
the most relevant, targeted messaging across the board.

It also plays an important role in developing other strategies, such as

your buyer personas, customer lifecycle stages, and core brand
proposition.

By leading with a consumer-centric approach like STP, you can be

sure that every inch of your marketing is relevant to your audience —
thus, increasing the likelihood that they convert, purchase, and
become lifelong customers.

Examples of Great Market Segmentation and

Positioning
Brands are segmenting, targeting, and positioning their audiences
and marketing constantly, oftentimes without us (consumers) even
noticing. Ever seen a brand or product and thought “Huh, that’s
perfect for me” or “Wow, right place at the right time”? Yeah …
you’ve been subject to the STP model.

Let’s review a few examples of great marketing segmentation and

positioning.

1. Panera Bread

With countless fast casual restaurants on the map, it’s hard to decide
where to eat when you’re in the mood for a quick meal. For some
reason, Panera Bread always comes to mind (at least for me).

Panera has successfully cornered the “health-conscious” and

“climate-conscious” segment of the fast casual dining industry. Is
Panera’s food so different from other fast casual options? Not
entirely.

But by branding themselves with the perspective that “we believe

that good food, food you can feel good about, can bring out the best
in all of us”, Panera remains top-of-mind as a place to get high-
quality food, fast.

2. AllBirds
Like dining opinions, there are so many shoe brands on the market.
But AllBirds didn’t let that stop it from carving out a new niche in a
busy space full of comfortable, active shoe options.

How did AllBirds position itself to set itself apart from the
competition? By elevating its eco-consciousness and placing that
front and center in its marketing. According to the AllBirds website,
the brand “crafts with planet-friendly natural materials, like merino
wool and eucalyptus trees, because they're our best chance for a
sustainable future.”

At first glance, AllBirds shoes don’t look too terribly different from
other running or walking shoes. However, its audience segment that
cares about sustainability and earth-conscious products knows the
difference.

3. Billie
No longer can businesses simply segment their audiences by “men”
and “women” — the individuals within each broad gender group vary
too much, and razor brand Billie took note of this.

In an effort to extinguish the “pink tax,” Billie markets cost-friendly

razors and associated products. Moreover, they work to normalize
body hair and other forgotten or shamed parts of women’s bodies.

Through this positioning, Billie is able to set their products apart from
competitors and create a strong, positive community around their
brand.

4. Hinge
The world of online dating is a busy, strange place. From Tinder to
FarmersOnly.com, there seems to be a place for everyone to meet,
well, anyone. Hinge came on the scene only a handful of years ago,
yet it has skyrocketed to the top of the list of the most popular and
reliable dating app.

Time and time again, I’ve heard that Hinge is a favorite because it
works — meaning it helps people meet people and make real
relationships. You wouldn’t think a dating app would position
themselves to eventually be unnecessary, but that’s exactly what
Hinge has done. In fact, its mission statement is to “[build] an app
that’s designed to be deleted.”

By putting the needs and desires of its audience front and center,
Hinge has created a more trustworthy, in-demand online dating
experience and set itself apart from its competitors.

The Case for Using STP Marketing

The segmentation-targeting-positioning model is designed to help
you better target your marketing messages and better serve your
customer base. It’s a win-win for you and your customers!

This article was originally published October 29, 2020 and has been
updated for comprehensiveness.