Increase profit opportunities with STP

Segmentation, targeting, and positioning (STP), the process that can help you identify and evaluate opportunities to increase sales and profits. Defining and understanding the vision or objectives of the company’s marketing strategy and the mission of the company are key factors before starting the STP process. Using a SWOT analysis, companies can find their mission. A SWOT analysis consists of the company’s strengths, weaknesses, opportunities, and threats. Once the company mission is defined, we can go through the STP process.

STP process graphic

Let’s dig deeper into what this process means.

  1. Segmentation

    Segmentation breaks customers into groups or market segments. A market segment includes consumers who respond similarly to an organization’s marketing efforts. Each segment will have similar needs, wants, and characteristics. This makes it possible to gear your product or service specifically for them. Developing descriptions of the different segments helps an organization better understand the customers in each market segment. One organization’s product or service can have multiple segments.

    Companies can choose to break their customers down into segments through:

    • Geographic segmentation: organizes customers into groups on the basis of where they live
    • Demographic segmentation: groups consumers according to easily measured, objective characteristics such as age, gender, income, and education
    • Psychographic segmentation: how consumers describe themselves – how they spend their times and money, what activities they pursue, and their attitudes and opinions about the world in which they live
    • Benefit segmentation: groups consumers on the basis of the benefits they derive from products or services
    • Behavioral segmentation: divides customers into groups based on how they use the product or service
  2. Targeting

    This gets even more specific than your market segments. After a company has identified the various market segments for its product/service it then evaluates each segment’s attractiveness and decides which ones to pursue. This narrower focus is called a target market and it’s where the company will spend most of its marketing budget.

    Companies use the following target markets:

    • Undifferentiated targeting strategy, or mass marketing: when everyone might be considered a potential user of its product
    • Differentiated targeting strategy: target several market segments with a different offering for each
    • Concentrated targeting strategy: selecting a single, primary target market and focuses all its energies on providing a product to fit that market’s needs
    • Micromarketing or one-to-one marketing: tailoring a product or service to suit an individual customer’s want or needs
  3. Positioning

    A company must now decide how it wants to position itself within each market. This market positioning involves defining the marketing mix variables so that target customers have a clear, distinctive, desirable understanding of what the product does or represents in comparison with competing products. The positioning strategy helps communicate the firm’s or product’s value proposition, which communicates the customer benefits to be received from a product or service and thus provides reasons to purchase.

Here are some real-world examples of using STP to identify and evaluate opportunities for increasing sales and profits.

STP process graphic

Information gathered from Grewal, Dhruv, and Michael Levy. Marketing. 5th ed., McGraw Hill Education, 2017.



Business Growth Strategies

Business Growth

Growth within a company is vital to its survival. That means constantly evaluating your company to see where there is potential for growth.

Knowing who you are currently targeting will help in your decision for growth. That means you must identify and understand your market segments and target audience (learn how in Increase profit opportunities with STP) before considering the choices for growth.

Once you understand your target market and company impact there are four overall strategies we recommend considering and choosing from to grow your business.

1. Market Penetration

Focuses on current products and current markets in order to increase market share. Market penetration requires greater marketing efforts or intensified distribution efforts where the product is already sold. It is the lowest risk growth strategy.

This growth strategy might be achieved by attracting new consumers to the current target market or encouraging current customers to promote or buy more often from the company. Achieve these strategies by making your current product more appealing.

Example: Under Armour has consistently focused on selling performance apparel such as athletic footwear, clothing, and accessories. It has fueled its growth by focusing largely on promotion, distribution, and consistency. Under Armour has been very effective at developing inspiring advertisements that feature well-known male and female athletes [lumen].

2. Market Development

Uses the existing product/service and current marketing offering to reach new market segments. It seeks to sell into new markets. Discovering new uses for your product and expanding domestically and sometimes even internationally will help you reach this grow strategy.

Example: Uber started out as a ride service app that allowed users and users friends to get a ride from point A to point B in whatever ride was offered to them. Since then Uber has expanded to offer Uber Pool (ride sharing), Uber Comfort (newer cars with extra leg room), Uber Black (luxury upgrade) and more to seek a new market of customers.

3. Product Development

Offering a new product or service to the current target market. Branch off from your current product/service to offer a new product or service you think the current target market would enjoy and use.

Example: With environmental concerns growing among consumers, rising gasoline prices and a desire for a reliable vehicle, Nissan developed a new product. The Nissan Leaf became the first electric vehicle. Nissan has remained a leader in the electric vehicle market.

4. Diversification

Offering a new product or service to a market segment the company currently does not serve. This opportunity can be either related or unrelated.

Related diversification means the current target market shares something in common with the new opportunity. Companies might purchase from the same vendors, use the same distribution and management information system, or advertise in the same spot to target markets similar to their current consumers.

Unrelated diversification means the new business lacks any common elements with the present business. It does not rely on the strengths of the current market or products. It is very risky.


  • Uber started out as a ride service app but has since used diversification to introduce a new product, Uber eats (food delivery on demand).
  • General Electric began as a merger between two electric companies. Over the years, GE successfully branched out into a wide variety of industries including power and water, transportation, oil and gas, aviation, healthcare, and more.


Make sure you choose the option that is best for your company. Take the time to do research and really understand where your company should go next.

Information gathered from Grewal, Dhruv, and Michael Levy. Marketing. 5th ed., McGraw Hill Education, 2017.


Consistency and Raising Business Awareness

As time goes on, there is a constant clamor for change in business marketing strategies. The pundits are declaring that consumer habits are constantly changing and hence marketers must change the way they market. We agree that the marketing strategies must change to match the way people are actually shopping. We are going to list those methods which need consistency to get results.

Reaching Out

With the business marketing databases of having 95% accuracy while consumer databases with approximately 90% accuracy, the immediate effective way is to reach out. Do this with a multi-pronged process of short but effective emails and courteous calls focusing on your product. In addition to using email to reach out, your team should utilize it as a follow-up tool to stay in touch with prospects and customers. 

Social Media

Social media is highly rated in marketing strategies but one point which is often overlooked is – consistency. A regular and consistent posting timeframe will improve your visibility and drive up your metrics on different platforms. Both your own original and shared quality contents are essential to continue the consistent presence there.

Quality Business Blog

Blogging with expertise and looking to provide answers to problems or issues arising in your sector on a regular basis, will keep visitor flow steady to your website. Expert commentary builds your brand as the credibility of your product builds. Without hesitation, your experts should be available to address issues on a priority basis. 
Last but not the least, please feel free to reach out to the expert team at for clearing any hurdles you face along the path to success. 877.448.0101 We are available Monday through Friday, 8:00 am – 5:00 pm CST