What is the STP Process?

About the STP process?

The STP process is an important concept in the study and application of marketing. The letters STP stand for segmentation, targeting, and positioning.

The STP process demonstrates the links between an overall market and how a company chooses to compete in that market. It is sometimes referred to as a process, with segmentation being conducted first, then the selection of one or more target markets and then finally the implementation of positioning. The goal of the STP process is to guide the organization to the development and implementation of an appropriate marketing mix, as highlighted in the following diagram.


Definitions of segmentation, targeting and positioning

Market segmentation can be defined as:

  • The process of splitting a market into smaller groups with similar product needs or identifiable characteristics, for the purpose of selecting appropriate target markets.

Targeting (or target market selection) refers to:

  • An organization’s proactive selection of a suitable market segment (or segments) with the intention of heavily focusing the firm’s marketing offers and activities towards this group of related consumers.

And positioning (which is sometimes referred to as product positioning) is:

  • Positioning is the target market’s perception of the product’s key benefits and features, relative to the offerings of competitive products.


STP models

There are two alternate models that help marketing students understand the STP process.

The introductory model simply uses the three letters of STP to highlight the core elements of the process, namely segmentation, targeting and positioning.

This approach is shown in the following diagram and discussed in the Basic STP Process section.


Basic STP Process of segmentation, targeting and positioning


While this basic model is a good starting point for understanding the overall process, there are a number of smaller steps that should also be understood, which are outlined in the following diagram and discussed in the Full STP Process. By reviewing this more detailed approach, students will gain a much greater understanding of this important marketing concept.


Full steps for the overall segmentation, targeting and positioning process