8-Step Guide to Create an Effective Segmentation Targeting and Positioning (STP) Model (2022)

STP (Segmentation Targeting and Positioning) model is the most famous marketing model. What can be the most effective steps to build an STP model? Let’s take a look. 

A fundamental idea in contemporary marketing is segmentation, targeting, and positioning. Without it, marketing campaigns would be impersonal, lack customization, and generally unable to convert at a rate that most businesses would consider adequate. Let’s take a look at the details of an STP model.

8-Step Guide to Create an Effective STP Model 

  1. Explain The Market

The entire globe may be your marketplace, but dividing it into manageable portions is the key to dominating it. You must first define your Total Available Market (TAM), Serviceable Available Market (SAM), and Serviceable Obtainable Market to determine the market segment in which you can hit the bullseye (SOM).

1. Total Available Market (TAM):

The total aggregate demand for a good or service is called TAM. TAM is the amount of money a company can make if it controls 100% of the market. In other words, it’s the brand’s largest available market.

  • Serviceable Available Market (SAM): 

A fraction of the total available market that suits your product or service is known as SAM, a subset of TAM. SAM can outline terms of regional or product-specific restrictions.

  • Serviceable Obtainable Market (SOM): 

The serviceable available market (SAM) sector that you can reasonably target after considering concerns like differentiated products, budget, and competition is known as the SOM.

2. Make A Segment Audience

You need to know your market definition so that you can segment it forward. 

The audience can get divided into segments based on geography, demography, conduct, or thorough and comprehensive. Still, ideally, a combination of all four will enable you to create segments that are distinct from one another. Your segments will be more clearly defined with the more segmentation layers or variables you include.

Consider the situation when you are marketing a high-end makeup item. In that instance, you can target high-earning professional women in India (demographics) who engage with makeup accounts on social media and are prepared to spend money on high-end cosmetics (psychography).

3. Find What Will Suit Customer’s Eye

Assess the attractiveness of each section by gathering the data for all the segments in one location. You can consider variables like return on investment, segment size, and growth potential in your assessment. Once more, tools like Salesforce Data Studio and CDP facilitate data collection and provide visibility into various audience categories, enhancing segmentation.

4. Carefully Look Into Your Competition

Now that you’ve figured out how to segment your audience, it’s time to evaluate your product and see how it compares to the offerings of your rivals. Make a table listing all of the capabilities of your products and those of your competitors, perform a SWOT analysis to find gaps, and determine the best route to your target market.

5. Fix The Positioning Of Your Company

Now that the first segmentation and targeting work is done, you can concentrate on positioning your product to win the majority of the market. Any one of the following placement tactics, or a combination of them, can be used to create your STP model for your business:

  • Competitor-based positioning: demonstrating where you excel over your rival.
  • Positioning based on the demands of the consumer: how well your product meets their needs.
  • Price-based positioning: How you position yourself to be reasonably priced and provide customers with more bang for their buck.
  • Benefit-based positioning: explains the advantages that your clients will experience by choosing your product over those of your rivals.
  • Positioning based on attributes: identifying your value proposition or USP, which goes beyond features and costs.
  • Positioning based on prestige: how clients acquire a higher status by purchasing your goods.

6. Build Your Personas

A persona is a semi-fictional consumer stereotype that describes a specific clientele’s characteristics, objectives, problems, and biases. Your team will use your list of personas to determine the optimal strategy and window of opportunity for piquing their interest.

Reread the brief story. Writing a little narrative that follows your consumer through a workday and a weekend day is the simplest way to frame a persona. Search for recurring patterns such as habits, emotions, values, and sources of friction.

7. Choose Your Marketing Mix

Selecting your “marketing mix,” which supports reinforcing your positioning, is the last step of the segmentation, targeting, and positioning strategy. The marketing mix’s four Ps are product, price, placement, and promotions.

Products stand for qualities, including superiority over the competition, features, benefits, design, and support.

What consumers are prepared to pay for the item is reflected in the price. It addresses list pricing, special offers, payment options, etc. Pricing your product significantly less than your competition may benefit you right away, but it may hurt your sales in the long run.

Placement refers to the “where” of your company’s distribution. E-commerce, physical stores, inventories, logistics, trade channels, etc., are all included.

Promotion considers “how” your product gets to your target market. It includes advertising, public relations, promoting sales, word-of-mouth, influencer marketing, and other marketing strategies.

8. Perceptual Mapping

A geometric study of how different things are seen is called perceptual mapping. Building a map-like diagram of consumers’ perceptions of competing brands along with pertinent product qualities is known as perception mapping.

For instance, many brands compete against one another in the fashion retail industry based on various essential characteristics, including brand recognition, store presence, pricing, and the ability to produce fashionable clothing.


Businesses can determine which of their most significant client segments to focus on when developing products and marketing materials using the segmentation, targeting, and positioning (STP) model. It makes it easier for you to design tailored marketing strategies that turn website visitors into paying clients.