Segmentation-Targeting-Positioning (STP)


In order to make the communication plan effective, many firms use the model of Segmentation, targeting and positioning. In addition, it demonstrates the link between the overall market and the part of the market in which the business operates. The main objective of STP is to support organisations for the development and implementation of the marketing mix.

  1. Segmentation

Market segmentation refers to an activity where the whole market is divided into different segments based on the needs of consumers. The basis of market segmentation covers various areas that are  discussed as follows:

  • Demographic – In this segmentation, the market is divided on the basis of demographic variables including gender, age, occupation, income, marital status, family, race, nationality and so on.
  • Geographic – In Geographic segmentation, the market is divided on the basis of geographical areas. For instance – In India, McDonald’s does not sell beef products due to the religious beliefs of Indians, whereas McDonald’s sells its beef products freely in the US.    
  • Psychographic – Psychographic segmentation is based on the lifestyle of individuals. Also, the market is divided on the basis of the personality of an attitude of individuals.
  • Behavioral – In this type of segmentation, the market is divided on the basis of behaviour, tastes and preferences of consumers. The segmentation of the products and services is based on the usage and knowledge of the product.



Targeting is a process that examines the most important segments from the stage of segmentation.

  • Single Segment Concentration: It is considered as the easiest case in an organisation. The company chooses a single segment as the target market and segment provides a single product. But, here the segment is different and the product is different.
  • Selective Specialisation: In selective specialisation, the organisation chooses various segments. A number of segments are selected by a company and then it sells various products to every single segment.
  • Products specialisation: In this alternative, an organisation creates a particular product that can be sold to a number of segments.
  • Market Specialisation: The market specialisation includes serving a number of requirements of a certain segment. 



Positioning is the final stage where organisations position its products and services according to the characteristics of consumers. Before positioning the product, a business should consider some strategic questions discussed as below:

  • What are the requirements of customers from the business?
  • What are the unique features of the products and service offered by a business to its customers?
  • How the products and services of the business are different from their competitors?