A Marketer’s Guide to STP Analysis

The Segmentation, Targeting, and Positioning (STP) marketing model is a smart way to run impactful and efficient marketing campaigns. With any business model, your STP should be regularly reviewed and optimized to ensure it performs as you planned. Tools like Audience Intelligence and One2Target from Semrush can help.

Here’s everything you need to know about STP analysis and how to conduct it well.

What Is The STP Marketing Model?

The STP model stands for Segmentation, Targeting, and Positioning, and is a popular strategic framework. STP involves identifying different customer groups, selecting groups to prioritize, and orienting products/services to resonate with those groups.

The STP model requires detailed audience research, resource allocation, competitor analysis, and aligning your brand objectives with customer wants and needs.

Before getting started with the STP model, it’s important to understand the definitions of each component of the STP marketing model.

Segmentation: This involvesdividing markets and customers into smaller groups that share characteristics (for example, demographics, psychographics, behaviors or needs). 

It requires market research and understanding of all the potential customers within the sector. Segmentation is purely outward looking in that you do not need to consider your product, offering or brand – simply all the people who could benefit from it.

Targeting: This means assessing the potential of each of your segmented groups – this could be based on the size, growth, level of competition, or compatibility of groups to your brand values. Targeting lets you prioritize segment groups and allocate your resources according to the groups that are most lucrative. 

Positioning: This is when youdevelop your messaging so that your target audience understands how your product or service can help them and how it is different or better than that of your competitors. The strategy emphasizes your brand’s unique value proposition and aligns with the preferences of customers within the chosen segments.

An example of the STP marketing model for a smartphone company could look like this:

1. Segment the market into groups that include tech-savvy young users, budget-conscious families or businesses looking to provide company phones (note your market segmentation would probably be much larger than this).
2. Target the tech-savvy young users because they value cutting-edge technology and the company prides itself on delivering the latest features first. This group is also willing to pay a premium for the latest features, which aligns with the company’s pricing model.
3. Position your smartphones as sleek, stylish devices with advanced features that support the lifestyle of tech-savvy young customers. Brand messaging and design could convey that the phones are useful for work and leisure, while still being fashionable and sophisticated.

Benefits Of The STP Model

There are a number of reasons why the STP model is useful for marketers and brands as a whole.

Enhanced customer understanding 

By gathering more granular insights into customers’ backgrounds, characteristics, and preferences, you can have a clearer picture of the market as a whole. As a result, the reasons for targeting (and not targeting) certain sections of the market will become crystal clear. 

Improved resource allocation 

Focusing on one or two key groups – and aiming to dominate that market segment – keeps your marketing sharp and effective. Also, by applying appropriate resources to priority customer segments, you’ll probably see a higher return on investment. 

Boost competitive advantage 

When it comes to positioning against your competitors, you’ll be at a distinct advantage. By refining your messaging to align with your target segment’s challenges and goals, your marketing will resonate more strongly. Your audience will better understand what you are offering – and they will know why you are different from other industry players. 

Increase brand loyalty 

If you understand your customers deeply, you’ll know what they care about. It means you can communicate your brand values, which can lead to higher levels of trust and customer loyalty. 

Elevate innovation 

Market research also helps you be more market oriented. Instead of building products or services and seeking people to sell them to, you will be able to see what problems and challenges already exist. You’ll have opportunities to develop new solutions and products that matter and help people.

How To Apply The STP Model

Applying the STP model makes the most sense when broken down into its three components: segmentation, targeting, and positioning. Within each element, there are factors to consider, and tools and practices to ensure that the STP model supports a successful marketing campaign.

1. Segment Audiences

You could choose to segment the market in a number of different ways. The key here is that you are simply looking at the data and you shouldn’t exclude any part of the market. Segmentation includes a full overview of your potential clients. 

Some of the most common ways to segment your audience are:

• Demographics – people’s age, religion, sexes, income levels, education levels, family size. 
• Geographic – people’s location, languages spoken
• Psychographics – people’s lifestyle, hobbies, interests, opinions
• Behavioral – people’s brand loyalty traits, price sensitivity, purchasing style, usage rate
• Media preference – people’s preferred social media, television networks, newspapers, search engines. 
• Benefit – people’s desires, pain points, needs, and hopes

To start with any form of segmentation, collect all the data that you already have about your customers. Such data could include past customer surveys, user interviews, website analytics, and sales team feedback. 

Next, identify broad segments (groups that have characteristics in common, but won’t be your final segments). For example, you could place users in groups according to their age or location – these can provide a starting point to build out your segments. 

The One2Target tool from Semrush is useful here, as under the ‘Trends’ tab, you can enter your business location and five of your competitors’ domains. 

You’ll receive a breakdown of audience demographics, socioeconomics, behavior, and audience overlap. This gives you a window into other customer segments and audiences you are not targeting. 

In the following screenshots, we use OpenAI audience data as an example.

The ‘Demographics’ tab can tell you how old the people visiting your competing websites are, their ***, and location. For OpenAI, the majority of users are male, aged between 25-34, and from the United States.

The ‘Socioeconomics’ can share the household size of customers, income level, employment status, and education level. This data comes from domain-specific data, based on a combination of third-party data and Semrush’s own proprietary AI and machine learning algorithms.

In the example below, we see that the majority of OpenAI users have a low income level, have 3-4 people in their household, and work full time.

The ‘Behavior’ tab shares audience interests and preferred social platforms. OpenAI users are predominantly interested in online services and mass media. They access their interests mostly via desktop, and their social media of choice is YouTube.

Meanwhile, ‘Audience overlap’ highlights what other websites audiences visit, so you have a more comprehensive idea of their lifestyles. LinkedIn, Microsoft, and Canva are the top three websites of interest for OpenAI users.

This data can inform you when curating focus groups or initially putting customers into segments. It ensures that your segmentation is data-driven, and therefore more representative.

As you delve into these considerations, aim to make buyer personas for each segment. These will help you further understand who to target. 

2. Identify Target Segment Groups

Once you’ve established each market segment, it’s time to define your targeting. These are the groups that are best aligned with your brand and have the most potential to bring positive ROI.

Targeting requires looking at each segment in turn and exploring your buyer persona’s motivations, challenges, and behaviors – as well as their potential value to your business and return on investment. When pinpointing your targets, you may wish to account for things like length of sales cycles, average spend per customer, or price sensitivity. 

For instance, you may have identified a group of people who are the same age, ***, have the same income, and interested in rollerblading. To determine the target segment group, however, you drill down and look at how experienced people are in the sport, i.e. beginner, intermediate, and advanced:

• Beginner roller bladers will likely need more guidance choosing equipment and finding places to skate. 
• Intermediate rollerbladers will probably have a basic knowledge of the sport, but want to improve their technique. 
• Advanced rollerbladers could want in-depth information to win races and purchase the best gear.

By visualizing who exactly you’re targeting, you have a relatable representation of those customers and can ensure that your STP is human-centric and subsequently more impactful. 

For example, a buyer persona for an experienced roller blader could be – 30-year-old Ben, a postgraduate student, living independently in San Francisco, California. Ben has been rollerblading for six years and is interested in health and personal development. 

3. Define Positioning 

Pay attention to where you can customize elements of your marketing strategy to connect with each segment more meaningfully. This includes:

• Offering different products for different groups. For example, the dark roast coffee bags could be larger in size to cater to family households. Other coffee bags for single students, living on a budget, could be smaller in size.
• Promoting products for different uses. For example, dark roast coffee could be available in beans, because women with a medium income are more likely to own a coffee grinder and prefer freshly-ground coffee. Other user segments may want a cup of coffee that is faster to prepare, so have coffee beans that come pre-ground.
• Discounting and special pricing. For example, students could access a loyalty scheme where they receive a free coffee bag after 10 purchases.
• Different product sales locations. For example, coffee bags for young women with families could be featured in family-friendly cafes, whereas coffee for other customers could be mostly available online.

Focusing Content on your Targets

Alongside this customization, prioritize tailored content. Create a content calendar for your website that states what type of content will be published for target segments, when, and on what platform. 

For instance, our example coffee brand could work with women influencers to produce content on Instagram for young women with families, and a medium income looking to buy coffee. The brand could also write content about coffee consumption around children or create a mini series on YouTube about coffee and family dynamics. 

A content calendar will help keep you on track to regularly start conversations with your target segment, and allow you to gauge their engagement.

Using Audience Intelligence

Audience Intelligence is a platform that has in-depth insights into your target audience, clustering people by characteristics and comparing them with a global baseline.

It’s also a great tool to find content partners for a marketing strategy. In the ‘Influencer and brands’ tab, you can also view the influencers and other companies that your target groups engage with. There are more than 20,000 influencers in the Audience Intelligence database, including bloggers, journalists, and micro and macro influencers.

You can equally research the content that your target segments are interacting with through Audience Intelligence. In the ‘Media affinity’ tab, you can look at the offline and online channels that selected target groups engage with – including magazines, events, and social media platforms. 

In the ‘Content’ tab, you can see content that your segments have liked and shared, as well as the top hashtags and keywords from these posts, and the domains where this content comes from. This data ensures that you know what already gets people’s attention, and how you can reach them with the right messaging too.

Elsewhere, in the ‘Personality’ tab, you can find ‘How to create effective messaging’. Here, you have a breakdown of wording, imagery, style, branding, and aesthetic description that appeals to the group and criterion you have selected. 

This messaging is created with a behavioral psychologist and aligns with the various OCEAN personality types. 

On to of this, Audience Intelligence can support with persona-building because it provides reports around specific audiences, providing real time data for:

• Demographics: Audience Intelligence lets you dive deeper into the details of your segments, seeing location by country and city, first language, age range, and more:

In the Socioeconomics tab, you can explore more granular data, such as level of education, job, marital status, even income.

These are broken down into clear categories, making it easy to position your messaging later. 

• Media affinity:
  You can see each segment’s media affinity. This can be used to help social media campaigns, or even ad placement. 

• Content (data reported for 30-day period):

• Personality (OCEAN personality types)

Openness
Conscientiousness
Extroversion
Agreeableness
Neuroticism

Also see how willing your audience is to buy, and how they like to do it:

Understand how your segments spend their time online. 

It also helps you segment your audience into recognizable groups: 

This information allows you to really know your customers and their motivations, and develop personas that match the real people you want to use your products and services. Ultimately, you can market to individuals, not the masses.

STP ****** and marketing on the move

Just as people’s interests, wants, and lives rapidly change, so too does marketing. Your STP model should be a flexible framework for your marketing strategy – that means the structure of segmentation, targeting, and positioning should be consistent, but that the insights for and application of the model have to be regularly updated. 

One2Target and Audience Intelligence can keep you atop of your audience dynamics, and power genuinely effective marketing campaigns time and time again.