STP approach and its success recipe

Sofia has just started a new job as a marketing manager in an outlet. She conducts a careful analysis of sales data within the first few weeks, and quickly identifies a profitable opportunity with a particular group of high-value customers.

So, she brainstorms several ideas with her team, and they come up with an exciting new product which has a potential to be a real success for the company.

She has identified a profitable segment of the market, but how has she done this? How can her team members develop a perfect product for these people And how should they communicate  its benefits?

 It is because a smart businessman knows very well that his business can succeed only if it can create true value to its customers. Businesses must use a customer-driven marketing strategy to create the right impression and deliver on the promises made. Marketing is a process of reaching out to consumers to create awareness about the product which eventually sell it. 

So Sofia has an offering and she wants to sell it. In this situation lets see where segmentation, targeting and positioning come into picture.

SEGMENTATION:

In an idealistic way, who is a customer? A customer is a person who expects the best possible product/service in the least possible price.

Lets see it with an example. A customer wants to buy a smart phone. What do I expect? I want Apple company to give me an iPhone 6 at Rs.2999

Ideally what a company wants to do? A company wants to sell a least cost product at a maximum price in order to make huge profit. As the world is not ideal, the consumer would know he won’t get what he expects and will settle for an optimal product for the money he/she has. So in reality what can a company give to a customer? A company can give the best possible product and services in the premium price, value based products for least possible price and the semi-premium products for the intermediate price range. So the company will segregate its customers on the basis of price, on the basis of many parameters including need, demography, usage pattern etc. of the customers which is known as Segmentation.

TARGETING:

A company could offer products or services for one or more than one of the identified segments. So choosing a particular segment out of the available segments to cater is called targeting. Let’s again take the example of smartphone market.  If we take Samsung, it targets all the available segments. In India we could find Samsung smartphone from Rs.5999 to Rs.45000 whereas Apple's offerings starts from Rs.25000. This is a strategic decision an organization makes based on their values, vision and mission. 

POSITIONING:

Positioning is all about creating an impression in the minds of the consumer. It is the way in which the end-user will define your product or service in comparison to your competitors’ offerings. For example, Tide is positioned as a powerful, all-purpose family detergent whereas Apple bee’s positioning strategy is “Eating’ Good in the Neighborhood”. There are several factors that can help companies choose the right positioning strategy such as:

·         Identifying value differences 

·         Choosing competitive advantages

·         Selecting Positioning Strategy 

Thus Businesses with a good plan for segmentation, targeting and positioning have already conquered half the battle of marketing and reaching out to their potential customers. So, if you are looking to launch your business.first take this course to make sure you get a jump start on creating a winning and differentiated business strategy.