A market refers to a set up where two or more parties are involved in transaction of goods and services in exchange of money. The two parties here are known as sellers and buyers.
It is the responsibility of the marketers to create awareness of their products amongst the consumers. It is essential for the individuals to be aware of the brandâ€™s existence. The USPs of the brands must be communicated well to the end-users.
An organization canâ€™t afford to have similar strategies for product promotion amongst all individuals. Not every individual has the same requirement and demand.
The marketers thus came with the concept of STP.
STP stands for:
S - Segmentation
T - Targeting
P - Positioning
The first step in the process of product promotion is Segmentation
The division of a broad market into small segments comprising of individuals who think on the same lines and show inclination towards similar products and brands is called Market Segmentation.
Market Segmentation refers to the process of creation of small groups (segments) within a large market to bring together consumers who have similar requirements, needs and interests.
The individuals in a particular segment respond to similar market fluctuations and require identical products.
In simpler words market segmentation can also be called as Grouping.
Kids form one segment; males can be part of a similar segment while females form another segment. Students belong to a particular segment whereas professionals and office goers can be kept in one segment.
Once the marketer creates different segments within the market, he then devises various marketing strategies and promotional schemes according to the tastes of the individuals of particular segment. This process is called targeting. Once market segments are created, organization then targets them.
Targeting is the second stage and is done once the markets have been segmented.
Organizations with the help of various marketing plans and schemes target their products amongst the various segments.
Nokia offers handsets for almost all the segments. They understand their target audience well and each of their handsets fulfils the needs and expectations of the target market.
Tata Motors launched Tata Nano especially for the lower income group.
Positioning is the last stage in the Segmentation Targeting Positioning Cycle.
Once the organization decides on its target market, it strives hard to create an image of its product in the minds of the consumers. The marketers create a first impression of the product in the minds of consumers through positioning.
Positioning helps organizations to create a perception of the products in the minds of target audience.
Ray Ban and Police Sunglasses cater to the premium segment while Vintage or Fastrack sunglasses target the middle income group. Ray Ban sunglasses have no takers amongst the lower income group.
Garnier offers wide range of merchandise for both men and women.
Each of their brands has been targeted well amongst the specific market segments. (Men, women, teenagers as well as older generation)
Men - Sunscreen lotions, Deodorant
Women - Daily skin care products, hair care products
Teenagers - Hair colour products, Garnier Light (Fairness cream)
Older Generation - Cream to fight signs of ageing, wrinkles
A female would never purchase a sunscreen lotion meant for men and vice a versa. Thatâ€™s brand positioning.