I once heard a new business owner define their target market as… wait… “everyone.” * shrink * While it’s nice to believe that everyone would be interested in buying your product or service, it’s not wise to define your target market as such. This definition (or the lack of it) not only creates a lot more work for you; It also hurts your actual target market: By expanding your reach too much, you fail to inform or educate your audience on how your product or service can improve their lives.
This is where segmentation, targeting, and positioning come into play. We developed this guide to help you understand how and why you should spend time better understanding your audience and targeting your marketing. Let’s dive in.
<h2>Segmentation, targeting and positioning</h2> Segmentation, Targeting, and Positioning (often referred to as Segmentation-Targeting-Positioning or STP) is a consumer-centric approach to marketing communications. The STP model helps deliver more relevant personalized messages to target audiences. In essence, STP helps you better target your marketing messages and better serve your customer base. The model can also reveal niche markets, discover new customers or market opportunities, and ultimately make your marketing efforts more efficient and profitable. STP allows you to take a large and anonymous audience and define how your different products (or different components of the same product) relate to specific consumer segments within that broader audience, thus understanding how to position your product (s) and messages to capture the attention of each segment. Let's analyze each part of the segmentation-targeting-positioning model.
Segmentation refers to the process of dividing your audience into smaller groups based on certain characteristics. This process allows you to group your individual audience members into similar groups so that you can better communicate your products, features, and benefits that may be more relevant to them. You can segment your audience based on one or more of these criteria: Demographics, which generally answers the question of who your buyer is (for example, age, gender, education, location, and profession) Psychographics, which answers the question of why what your buyer buys (eg, priorities, personality traits, beliefs, and values) Lifestyle traits, such as hobbies, entertainment preferences, and non-work activities Behavior, such as brand loyalty, channel preferences, and other habits Buyer Segmentation may sound a little familiar to another process we often discuss here on the HubSpot blog: creating shopper characters. The two are very similar in that they help you break down the most important factors in your target audience. But when shoppers help you create a handful of customer profiles that represent your broader audience, segmentation allows you to divide your audience into myriad segments, each of which can be uniquely targeted. For example, let’s say Paws & Tails is a Chicago pet sitting company that offers pet sitting, dog walking, and lodging services. Given the large number of pet owners in the city, they need to segment their audience into smaller groups to better understand how to position their services. Based on their research and their current customer base, they divided their audience into three main segments: Segment A is comprised of high-income pet owners who work frequently and need to walk dogs during the day and visit pet visits. -class individuals and families who travel and need overnight accommodations or pet sitting services Segment C is comprised of senior and retired pet owners who need help caring for their pets
With your audience segments in hand, it’s time to move on to the targeting phase. However, you must first decide which segments are worth targeting with your marketing. To figure this out, ask yourself a few questions about each segment: Is this segment made up of enough potential customers to justify targeting? Would it produce enough profit if the segment were to convert? Is it noticeably different from the other segments? Is it accessible to all Marketing and Sales members? Is your company equipped and able to serve the segment? Are there physical, legal, social or technological barriers that can prevent it? Choosing which segments to target is a strategic decision. Fortunately, certain strategic planning models like PESTLE analysis can help you better understand the viability of each segment. It takes a lot of work to successfully target a segment of your audience. Whether you have identified two segments or ten, don’t feel the need to target more than one segment at a time. Plus, targeting one at a time will help you better position your marketing for each specific segment much better. Following our example above, Paws & Tails conducts research to better understand its Chicago audience. Paws & Tails finds that segment A represents 60% of its market size, segment B represents 30%, and segment C represents 10%. Additionally, Segment A has a higher median income and is willing to pay more for pet sitting and walking services. Because of this, they choose to focus on the A segment.
At this point, you need to understand the demographics, psychographics, motivations, and pain points of the segments you’ve chosen to target, which can provide a starting point when it comes to positioning your product or service. First, take a step back and examine your product or service from the perspective of your chosen segment. If you were in your place, why would I choose your product over the competition? What features or benefits are most relevant to you, based on the motivations and weaknesses you have identified? This information is important in defining your brand positioning and understanding how it compares to your competitors. One way to understand where you are, well, is by building a positioning map, which is “the visual representation of specific brands versus axes, where each axis represents an attribute that is known to drive brand selection.” The segment you choose to target should dictate which two attributes you plot on your positioning map. For example, let’s say Paws & Tails decides that Segment A selects pet grooming brands based on two attributes: service area and reliability. This is what a brand positioning map (with fictitious brands) can look like. By understanding 1) what the target segment considers most important to brand selection and 2) where its competitors are succeeding (and falling short), Paws & Tails can identify an open market opportunity and position its marketing to fit. better to the needs and goals of your audience.
What is segmentation, targeting and positioning in marketing?
The STP model is an invaluable addition to any marketing strategy, regardless of your industry, product, or audience. Prioritize efficient and effective marketing and ensure that only the most relevant and specific messages are delivered across the board. It also plays an important role in developing other strategies, such as your buyer’s personas, customer lifecycle stages, and core brand proposition.
By leading with a consumer-centric approach like STP, you can be sure that every inch of your marketing is relevant to your audience, increasing the likelihood that they will convert, buy, and become customers for life.
Examples of great market segmentation and positioning
Brands segment, target and position their audiences and constantly market, often without us (the consumers) noticing. Have you ever looked at a brand or product and thought “Hey, that’s perfect for me” or “Wow, in the right place at the right time”? Yes … you’ve been subject to the STP model. Let’s go over some examples of good marketing segmentation and positioning.
one. Panera Bread
With countless quick casual eateries on the map, it’s hard to decide where to eat when you’re in the mood for a quick meal, but for whatever reason Panera Bread always comes to mind (at least for me). Panera has successfully cornered the “health conscious” and “weather conscious”Segment of the informal fast food industry. Is Panera’s food that different from other fast-casual options? Not completely. But for mark themselves With the perspective that “we believe that good food, food that you can feel good about, can bring out the best in all of us,” Panera remains a priority as a place to get high-quality food, fast.
Like food reviews, there are so many shoe brands on the market. But AllBirds didn’t let that stop it from carving out a new niche in a busy space full of comfortable and active shoe options. How did AllBirds position itself to differentiate itself from the competition? Elevating your eco-awareness and putting it front and center in your marketing. According to the AllBirds website, the brand “makes with natural, planet-friendly materials, such as merino wool and eucalyptus trees, because they are our best chance for a sustainable future.” At first glance, the AllBirds shoes don’t look much different from other running or walking shoes. However, your audience segment that cares about sustainability and green products knows the difference.
Companies can no longer simply segment their audiences by “men” and women “; individuals within each broad gender group vary too widely, and razor brand Billie took note of this. In an effort to extinguish the” tax pink, “Billie markets inexpensive razors and associated products. Additionally, they work to normalize body hair and other neglected or embarrassed parts of women’s bodies. Through this positioning, Billie can differentiate her products from competitors and create a strong and positive community around your brand.
The world of online dating is a strange and busy place. From Tinder to FarmersOnly.com, there seems to be a place for everyone to come together – well, anyone. Hinge came onto the scene only a few years ago, yet it has shot to the top of the list of the most popular and trusted dating app. Over and over again, I’ve heard that Hinge is a favorite because it works, which means it helps people meet people and build real relationships. You wouldn’t think that a dating app would eventually position itself to be unnecessary, but that’s exactly what Hinge has done. In fact, their mission statement is “we created an application that is designed to be removed.” By putting the needs and wants of its audience front and center, Hinge has created a more reliable and in-demand online dating experience and differentiated itself from its competitors. The Segmentation-Targeting-Positioning model is designed to help you better target your marketing messages and better serve your customer base. It is beneficial for you and your customers!