STP strategy - what is it and what are its stages of implementation?

Service Business

The fierce competition on the market poses more and more challenges to enterprises. Currently, production and sales are relegated to the background, and the key is understanding the market and adapting marketing activities to it. As a result of these changes, companies are increasingly using the STP strategy. The STP abbreviation is made up of the first letters of English words: segmenting, targeting, and positioning. We will take a closer look at them.

STP strategy - market segmentation

Companies' offers are becoming more and more individualized. Today, if something is for everyone, it is for no one, so companies focus on delivering a tailor-made product. At the outset, to prepare tailored offers, you need to define the market areas in which our company will operate and where will the STP strategy begin in the first stage. In effective segmentation, it is necessary to use appropriately selected criteria, which include:

  • Geographical criteria - they can be based on the administrative division (countries, voivodships, cities, regions) or indicate the scope (international, national, local). You can also take into account the climate or the size of cities (large cities, medium-sized, small, villages), as well as the type of development (rural, urban).


Selling the same product can vary greatly from place to place, eg agricultural products will probably sell best in selected rural areas. The climate can also determine the sales results of many products.

  • Demographic criteria - mainly gender, age, income, education and occupation. In the case of some products, it is also worth considering religion, family life cycle or the number of people on the farm.


Many demographic criteria determine the sale of products - for example, the cream for wrinkles will be targeted primarily at women aged 45+.

  • Psychographic criteria - define the lifestyle of the population, e.g. (activity, personality traits, interests, belonging to social classes).


It is worth combining psychographic criteria with demographic ones, as this gives a more complete picture of the market segment, e.g. a skateboard product can be targeted at young men / teenagers (aged 16-21) with an active lifestyle.

  • Behavioral criteria - are related to the benefits of having a given product, the frequency of its purchase, the consumers' attitude towards the product, the user's status (potential customer, user, regular user), and the degree of customer loyalty towards the product.

When dividing the market, we do not have to consider all the criteria at the same time. It is important that the selected segments are as large as possible and at the same time as homogeneous as possible, as well as distinguishable, measurable, i.e. allowing to measure the size of the segment and its purchasing power, and available, i.e. reaching the selected segment with marketing activities.

Determining the target market

In the next step, the STP strategy is to define the target market. Some companies confuse targeting, or targeting, with segmentation. In practice, targeting allows you to assess the attractiveness of segments and choose the right one.

A properly conducted STP strategy assumes that only at this stage the company determines who the recipients of its activities are and at the same time to whom the offer will be addressed.

An important criterion helping to choose the right target market is the assessment of the purchasing potential of our segments. At this point, you should also analyze the preferences of customers, the company's possibilities (e.g. whether it will have the funds to conduct promotions in selected target markets), as well as existing competition in selected segments.

What could the target market for a yacht manufacturer look like? For example, like this: men aged 35-55, active, living in Masuria or spending their free time in this region, with high income.


The STP strategy is based on identifying those market segments that are potentially interesting to us, and then selecting the target market. Unfortunately, even if we have chosen flawlessly and well defined our target group up to this point, only product positioning determines whether the company will be able to successfully enter the market or stay on it.

Positioning is creating the image of our product in the minds of customers. This procedure is aimed at convincing selected consumers that our product differs positively from competing products. In addition, positioning is to arouse the need for potential customers to make a purchase.

The following methods of product positioning are distinguished:

  • due to competition - consists in comparing with competing products, e.g. by exposing the weaknesses of the competition and the strengths of our products;

  • due to the attributes - it is about emphasizing the unique features of our product, which are not possessed by competitors' products;

  • due to functional or utility benefits - it is based on highlighting the benefits of our product;

  • due to the origin of the product - it is based on positive associations with a given country;

  • due to their purpose and methods of use - more and more often products are presented to us on specific occasions as a good way to gift or present for an upcoming occasion;

Example 1.

Toy x is the perfect gift for Holy Communion and Children's Day.

  • due to the category of the user - the product is targeted at a specific group of recipients;

Example 2.

Lipstick is the best cosmetic for hit, young single women from big cities.

  • due to the product category - it consists in trying to associate a given product with a specific product category;

Prayer 3.

Brand M shoes should come to mind first when consumers consider purchasing sports shoes.

  • due to the quality and price - we often meet with the emphasis on low price and high quality.

STP strategy - benefits and opportunities

The STP strategy allows you to choose a target market that will be profitable from the point of view of the company's operations. As a consequence, it enables effective use and even limitation of the marketing budget. It also enables the in-depth understanding of customers' needs, and then the development and targeting of effective advertising messages. The STP strategy is primarily the elimination of segments that cannot be reached due to excessively high costs. Other important advantages are the preferences or financial possibilities of customers or the attributes of the product itself. The STP strategy gives a chance to find a niche in which there is no competition or where the competition is very small.