STP
(
segmentation
,
targeting
,
positioning
) is extremely important when developing
web marketing
and
branding
strategies. Among these, “segmentation”, which means “classification” in Japanese, is important in selecting targets for promoting products and is the basis of
marketing strategy
.
This time, in addition to “segmentation,” we will explain the meanings of the terms “targeting” and “positioning,” how to classify them, and the latest information on actual usage examples.
Related materials:
segmentation
What does segmentation mean?
Segmentation means “division” in Japanese. Particularly in
marketing
, it refers to “classifying a large number of unspecified customers in various ways and dividing them according to attributes.” The most important thing in marketing is identifying the target audience for your product or service. Segmentation is important when choosing a target to promote your product.
Why segmentation is important
In today’s era of advanced IT,
- sex
- age
- place to live
- hobby
- interest
- preference
- interest
Each of them is becoming more and more diverse.
There are a variety of ways to advertise, including TV,
search engines
, various
homepages
, and SNS such as Instagram to YouTube. Therefore, classifying attributes and selecting the appropriate demographic will greatly influence the selection of media to promote the product and sales.
This will help you achieve the maximum effect with the minimum necessary marketing costs.
Points to consider when segmenting
When performing segmentation, doing it vaguely will not lead to final results. In order to discover and select targets that you can win with your products, you need to be aware of the following four points.
Priority (Rank)
This refers to prioritizing each segment based on its importance while comparing the characteristics of each segment with your company’s strategy. Comparisons with competitors are also necessary.
Scale effectiveness (Realistic)
This means confirming whether there is a market size for your product that can secure sufficient sales and profits. If the market size is too small, it may be a good target, but it is not a good place to enter.
Reachability
This refers to investigating the difficulty of promoting your company, distributing your products, and delivering them to users.
Measurability (Response)
Check things like “Can you clearly measure the size and characteristics of the segment?” and “Can you measure the reaction after marketing?”
Segmentation classification and cut points
There are four main criteria and angles for dividing into each segment:
Demographic variables
What are demographic variables?
- age
- sex
- family structure
- income level
- Occupation
- Academic background
- religion
This is a method of classifying based on the population ratio. Most commonly used in marketing to group customers.
The reason is
-
Attributes such as age, gender, and income level are closely linked to actual consumer
needs
and product/service usage rates. - There are two reasons: There are many public survey statistics available from the national government, local governments, and related organizations.
In the apparel, restaurant, and communications industries, product needs vary greatly depending on age group.
Therefore, it is necessary to be aware of the age group of the users and the life cycle of the product from the time it is introduced to the market until it disappears.
Additionally, in the areas of fashion, accessories, cars, real estate, financial products, etc., we develop products categorized by income and savings.
geographic variables
Geographical variables are classified according to conditions related to geography, such as differences between countries, prefectures, and municipalities, differences in whether the temperature is warm or cold, differences in population density, differences in main transportation methods, and differences in cultural background. Here’s how to do it.
Specifically, we will narrow down our targets to include domestic or overseas, eastern or western Japan, and even within the Kanto region, whether it is Kanagawa or Saitama prefecture.
Home appliances, food, clothing, etc., which are greatly influenced by temperature, have large geographical variables. On the other hand, geographic variables are smaller for online shop sales and online services.
psychological variables
Psychological variables are a method of classifying users based on factors related to their sensibilities, such as their values, lifestyle, and emotions. Also called psychographic variables.
The increase and diversification of information, including the Internet, SNS, and online conversations, has led to diversification of consumer needs, and the importance of psychological variables has increased.
For example, in the apparel sector, users can be divided into those who prefer luxury brands and those who prefer casual brands that are cheap and affordable.
There has been an increase in the number of individuals using SNS and online shops to sell products, and there is also a growing need to target users who seek cutting-edge and unique products.
behavioral variables
Behavioral variables refer to classification based on factors that users purchase, such as day of the week, time of day, purchasing environment, and frequency. In recent years, with the advancement of the Internet and barcode systems, behavioral variables have attracted attention because they can be easily measured.
If we compare it to a magazine, there are a variety of users, including users who subscribe to magazines, users who purchase magazines based on the content of each magazine, and users who purchase e-books. This includes analysis of purchase routes such as bookstores, convenience stores, and station kiosks.
Specific example of segmentation
Uniqlo
Uniqlo is a company that achieved success through innovative segmentation. In the fashion industry, where the target market was becoming increasingly fragmented, we had the advantage of doing everything in-house, from planning to manufacturing and sales.
Therefore, we redefined our company, rather than our products, into large segments based on four simple words: “Casual, Formal, Basic, and Trend.”
We analyzed our strengths, limited our products, offered a wide variety of colors and sizes, and sold products for all generations.
As a result, the company has grown into a company that continues to release hit products such as fleece and HEATTECH to the world. We have established a position of “good value and comfort.”
starbucks
Starbucks used smoking status to create a successful marketing segment. Since its founding in the United States, the company’s concept has been to “feel coffee with all five senses,” so it has been smoke-free and targeted people who don’t like cigarettes or the smell of cigarettes. When we entered Japan in 1996, we also banned smoking to differentiate ourselves from other companies in the industry. The progress that followed is well known.
JINS
Eyewear manufacturer JINS also achieved success due to its market segment.
When it comes to glasses, the general definition is that they are marketed to people with poor eyesight. From there, we set up a segment for people who have good eyesight but whose eyes get tired when using computers or smartphones. In response to these needs, we have released functional blue light blocking glasses that prevent the effects on the eyes and body, and have gained a high market share.
After segmentation, targeting and positioning (STP analysis)
Once you have created the segmentation explained above, you can set targets from among them (targeting), differentiate your products from them (positioning), and promote them.
This series of steps is called “STP”, which stands for segmentation, targeting, and positioning. STP is a basic marketing method. This can only be achieved by performing a series of STP analyses, from segmentation to targeting and positioning.
What is targeting?
This refers to selecting the segment that your company should target from among the categories classified by segmentation. For example, let’s say that people are categorized into people in their 30s, 40s, and 50s based on their age. Let’s say you decide to implement marketing measures limited to people in their 40s. This is targeting. Actually, from here we will add attributes such as gender, place of residence, and annual income.
What is positioning?
Positioning is determining your company’s position in the market. We carefully compare and analyze the products of our competitors to determine whether our products can win. Value that only your company can provide to users is a point of differentiation, and it is important to make users aware of this. We narrow down price, quality, sales
channels
, etc., and search for a competitive position for our company.
One way to find and determine your position is to use
a positioning map
.
Three benefits of STP analysis
The benefits of STP analysis can be broadly divided into three categories:
① Customer needs can be sorted out
STP analysis allows you to organize and understand customer needs in each market. In the process of segmenting the market, you can sort out what kind of customers are looking for what kind of products in which markets, which helps you understand the core demographic of your products and market new products.
② Can be differentiated from other companies
STP analysis allows you to compare your products and services with other companies’ products and services based on positioning. You can differentiate your products from your own by comparing what kind of products they are, prices, and features. Another point is that it helps you avoid competition with other companies, making it easier to choose markets where you can win.
③ Understand the strengths of your own products
The features, strengths, and appeal points of your products will become clear. You can share it within your company to strengthen your sales capabilities and come up with effective media strategies.
Notes on STP analysis
① It is okay if the order of STP is different.
STP analysis typically follows the sequence of segmentation → targeting → positioning. However, it is not necessary to stick to the order. Regardless of the order in which STP is analyzed, the results will not change significantly because they are linked. Start the analysis in an order that is easy to work on, such as when you have all the materials.
② Carefully calculate profitability
If your STP analysis reveals a market where your company’s strengths can be leveraged, consider carefully whether you can secure profits. The domestic market needs to be analyzed in light of future population decline, such as “The market is actually small” and “The market size is large now, but it will taper off significantly in the future.”
③ Check market entry and distribution channels
When you find a market that is suitable for your company, you need to investigate whether there are any problems with entering the market, such as logistics, and laws and regulations. If you actually enter the market, you need to understand the budget and structure for marketing, and make a comprehensive judgment as to whether you can promote it to customers, be recognized, and generate sufficient profits.
summary
Segmentation is the process of dividing customers in a market into different categories and subdividing them based on specific attributes. We have explained the flow from the method to STP analysis, including specific examples, targeting, and positioning. When performing segmentation, keep the following four points in mind and use them for targeting and positioning.
- Priority (Rank)
- Scale effectiveness (Realistic)
- Reachability
- Measurability (Response)
At the same time, it is also necessary to utilize the variables introduced to classify markets and customers.
- Demographic variables
- geographic variables
- psychological variables
- behavioral variables
Segmentation is becoming increasingly important as consumer needs become more diverse due to the development of IT. When performing segmentation, refer to the points introduced this time and conduct marketing that will lead to attracting customers and increasing sales.