What is the Difference Between STP and STDP?

STP vs STDP: What’s the Difference?

STP and STDP are both acronyms for a similar process in marketing, primarily part of market segmentation and its related steps.

STP stands for:

  • Segmentation
  • Targeting
  • Positioning

Whereas STDP, with the addition of the D, stands for:

  • Segmentation
  • Targeting
  • Differentiation
  • Positioning

As you can see, we have three identical steps of the STP components in both processes, but with “differentiation” added as an explicit component of the second approach.

Why is Differentiation Sometimes Included in the Process?

Differentiation is ALWAYS included in the process. The only difference is that some marketing textbooks, such as some versions of the Kotler text, split out differentiation FROM positioning to clearly show that differentiation is a critical step of positioning.

This means, that differentiation is included in some textbooks, purely for the purposes of clarity, rather than suggesting that it is an additional step in the process.

Are Positioning and Differentiation Different?

Yes and no. Let’s explore this a little further.

A brand’s/product’s positioning that is designed to be successful and effective in a competitive marketplace, will include differentiation. This is because without differentiation, it is much harder for a brand’s positioning to be successful.

However, it is possible to construct a brand’s positioning that does NOT have any differentiation. This means that it’s positioning is highly similar to other competing brands.

But while this is possible, it is far from ideal, and would NOT be considered an effective positioning.

Therefore, effective positioning ALWAYS includes clear differentiation, whereas ineffective positioning is not differentiated.

Points-of-Parity and Points-of-Difference

To make more sense of positioning, it is important to understand the distinction between points-of-parity (POPs) and points-of-difference (PODs). Effective positioning is made up of both POPs and PODs, as opposed to ineffective positioning which just has POP’s (without differentiation).

For POPs, we need to have aspects of our positioning similar to our key competitors on attributes and benefits that are important to our target market consumers. And for our PODs, we need to have key and important differences between us and our competitors.

The following ad for the Burger King flagship product the “Whopper” is a good example of positioning using a key point of difference.

While both Burger King and McDonald’s have the following POP’s: a range of burgers, fries, and sodas, lots of locations, family oriented, convenience and fast service, seating and parking options, and so on – which are all important attributes to the target market consumers.

However, Burger King differentiates its offering on size of their Whopper – creating a clear point of difference between them and McDonald’s, on attribute that would be quite important to some target market consumers, which should result in enhanced market share.

whopper vs big mac ad

In Conclusion

The two processes of STP and STDP refer to exactly the same process of moving from segmentation, to targeting, to effective positioning.

However, the inclusion of the D (standing differentiation), just helps highlight that a key component of an EFFECTIVE positioning MUST include differentiation.

Most/all marketers would be aware of the importance of differentiation when constructing their positioning, so the steps of STP should be sufficient to work through the process. However, for marketing students and relatively new marketing practitioners, the reminder of the important to differentiation in the letters STDP is helpful.

Helpful Explanation Video

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