Market Segmentation, Targeting and Positioning
Segmentation, targeting and positioning (STP) is the bridge between market analysis and the marketing mix. You must divide a market, choose a segment and create a distinct place in the customer’s mind.
Core rules
- Segmentation bases: geographic (region, city size), demographic (age, income, gender, education), psychographic (lifestyle, values) and behavioural (usage rate, loyalty, benefits sought).
- A useful segment is measurable, substantial, accessible, differentiable and actionable.
- Targeting options: undifferentiated (mass), differentiated (several segments), concentrated (one niche) and micromarketing (local or individual).
- Positioning is the value proposition in the target customer’s mind, often shown on a perceptual map. Repositioning changes that place.
Worked example
A city has students, office workers and families. A new cafe has Rs 40,000 monthly rent and seats 40. It chooses students for a Rs 49 breakfast combo, keeps tables free from 11 am to 1 pm and promotes on college groups. Reasoning: students are measurable and accessible near the college; the price fits their budget; the timing uses idle capacity. Families are not rejected, but the positioning is not built around them. This is concentrated targeting with a price-quality position.
Traps
Do not use segmentation and targeting as synonyms. A segment is not a product. Do not claim a segment is viable merely because it is large; it must be reachable and able to buy. Do not position on a feature competitors already own unless you can prove a difference.