Segment, Target, Position Marketing Theory

The process of targeted marketing, also known as STP marketing, includes the stages of segmentation, targeting, and positioning. Market segmentation entails a division into clearly defined groups of consumers, each of which may acquire certain products and services. The selection of target market segments refers to the assessment of the attractiveness of each segment and the choice of one or more market segments, which in turn influences marketing activities. Positioning may be understood as the communication to customers of information about key advantages and distinctive features of the products and services offered by a company with a competitive position in the market.

The selection of a target market should be given serious attention since the effectiveness of all succeeding strategies largely depends on it. Before choosing to target a segment, a marketer should answer a range of questions. For example, critical questions include what the needs and expectations of consumers are, or whether a company would be able to satisfy them. An additional essential trend is associated with globalization, which has opened markets and made competition fiercer. Accordingly, marketers encounter challenges in segmentation and positioning as e-commerce provides more purchasing channels. STP cannot be defined as a company-specific theory or one that leads to perfect segmentation, as availability and quality affect purchase rates more than other factors. It also seems that STP is likely to provide outdated information about customer expectations and preferences. Finally, STP fails to target customers who belong to several target segments, thus limiting understanding of their behaviors in terms of marketing.