STP
Also known as: Segmentation Targeting Positioning
Sequential approach: segment market, target chosen segments, position offering distinctively.
STP — Segmentation, Targeting, Positioning — is the foundational strategic-marketing framework that operates upstream of tactical 4Ps decisions, articulated principally by Philip Kotler in successive editions of Marketing Management (1967 onward) drawing on Wendell R. Smith's foundational 1956 article 'Product Differentiation and Market Segmentation as Alternative Marketing Strategies'. The framework structures marketing strategy through three sequential decisions: (1) Segmentation — divide the heterogeneous market into distinct groups of customers with similar needs, behaviors, or characteristics, using bases including demographic, geographic, psychographic, behavioral, and benefit-sought variables; (2) Targeting — evaluate the segments and select which to serve, considering segment size, growth, accessibility, and fit with company capabilities; (3) Positioning — develop a distinctive offering and communication that occupies a specific, valued position in target customers' minds relative to competitors. Al Ries and Jack Trout's Positioning: The Battle for Your Mind (1981) substantially developed the third leg of STP into its own substantive theory. STP became the dominant strategic-marketing framework from the 1970s onward and remains foundational to marketing education and professional practice. The framework's central insight — that marketing strategy must precede tactical execution — distinguishes it from purely tactical 4Ps thinking. Recent challenges from Ehrenberg-Bass (Byron Sharp's How Brands Grow, 2010) include the empirical claim that mass-marketing brands grow primarily through penetration rather than through targeted segment-specific positioning, complicating STP's strategic prescriptions.
Core components
- Three sequential decisions: Segmentation, Targeting, Positioning
- Segmentation bases: demographic, geographic, psychographic, behavioral, benefit-sought
- Targeting evaluation: segment attractiveness, company fit
- Positioning: distinctive valued position in target customers' minds
- Connection to 4Ps as upstream strategic framework
- Distinction from purely tactical 4Ps thinking
- Influence of Ries-Trout positioning theory
- Recent challenges from Ehrenberg-Bass empirical work on brand growth
Primary use case
Foundational strategic-marketing framework; basis for marketing-plan development across industries; reference framework in marketing-strategy education; foundation for substantial marketing-research practice (segmentation studies); integration with brand-management practice; pedagogical sequence in marketing courses (STP before 4Ps).
Common criticisms
- Ehrenberg-Bass research (Byron Sharp's How Brands Grow, 2010) has substantially challenged STP's strategic prescriptions — empirical evidence suggests brands grow primarily through penetration of broad markets rather than through targeted segment-specific positioning, and that 'targeted' brands often achieve their loyal customers as a consequence of size rather than as a strategic accomplishment
- segmentation in practice is often based on convenient available data rather than on actual differential customer responsiveness, producing pseudosegmentation
- positioning research has been argued to overstate the strategic importance of perceived differentiation
- commercial segmentation-research industry has produced enormous output of varying analytical value
- the sequential STP framing (segment first, then target, then position) doesn't always match strategic reality where positioning insights drive segmentation
- works better for high-involvement product categories than for low-involvement everyday categories.
Lineage
- Siblings
- 4Ps of Marketing, AIDA