What’s Segmentation, Targeting & Positioning? (STP Made Simple)
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Hello Future Leaders!
There are many, humans that have your dream right now. Many business students go to college with the idea of “making it,” and 1% of those that go for it actually do. To quantify your odds of that being YOU! the key is knowing who to reach, what to say, and how to stand out.
This is where STP—Segmentation, Targeting, and Positioning—comes in. It’s your essential framework for understanding your audience, focusing your efforts, and refining a message that truly connects. Forget trying to sound like the smartest human in the room and speak from the heart; STP is your simple, actionable roadmap to building a business with purpose.
-Let’s do this.
Your Business Compass
So, why is understanding each of these concepts so crucial for an aspiring Entrepreneur? Think of it this way:
Segmentation (S) It helps you figure out who your potential customers are. The market isn’t just a one size fits all, it’s made up of different human with their own needs, habits, and wants.
Targeting (T) helps you decide who you should be focusing on, and which customer is the best fit to serve.
Positioning (P) helps you decide what to say and how to say it. It's about creating a unique message that makes your business stand out in the minds of your target customers.
Together, they form the foundation of a winning marketing strategy. It ensure that you aren't just selling to "everyone," but are building meaningful connection with the humans who will become your most loyal customers.
Segmentation – Breaking Down the Crowd
What it is: Imagine you're trying to sell your entire town. You can’t just yell your message and expect everyone to listen. Segmentation is the process of putting people into smaller groups based on what they have in common. Think of it like sorting your friends into different clubs: the video game club, the sports club, and the art club. Each group has different interests.
Why it matters: Instead of trying to sell to everyone in town, you can focus on the small groups that are most interested in what you’re selling. This saves you a ton of time and money!
Case Scenario: A New Coffee Shop Let's say you want to open a new coffee shop. At first, you might think, "My customers are just caffeinated humans who drink coffee." But if you use segmentation, you'll see different groups:
Group 1: The Study Buddies. These are high school or college students. They need a quiet place to study, free Wi-Fi, and, caffeine to energize.
Group 2: The Coffee Runners. These are working humans on their way to the office. They need a fast, high-quality coffee and they're willing to pay a little extra for it.
Group 3: The Social Parents. These are moms and dads who want a comfortable place to meet friends while their young kids play are in school.
Your Action Plan:
Start Sorting: Grab a piece of paper and list all the different types of people you think might use your business.
Create a Character: For the most important groups, give them a name and a story. This is a customer persona. For example, "Meet Brenda, the Busy Councilor. She's 35, works downtown, and needs a coffee ready in under two minutes."
Check Your List: Ask yourself: How many humans are in this group? Can I easily reach them? Will they actually buy my product? This helps you decide which groups are the best to focus on.
Targeting – Picking Your Team
What it is: After you’ve sorted all your groups, targeting is picking the one or two groups you want to focus on the most. You're choosing your "team" to play on.
Why it matters: You can't be everything to everyone. Trying to serve everyone usually means you serve no one at a high quality. By choosing a specific group, you can make your business perfect for them.
Case Scenario: The Coffee Shop Revisited After looking at your three groups, you decide to focus on "The coffee runners" (Group 2). Why? Because they're a big group, they have money to spend, and you're really good at making the best coffee quickly. This is your target group.
Your Action Plan:
Compare and Choose: Look at the groups you identified and decide which one you can serve the best.
Match Your Strengths: Do you have a talent or resource that makes you a perfect fit for one group over the others? Pick the one that fits your business like a glove.
Write It Down: Make a clear statement about who you're targeting. For example, "Our coffee shop is for humans that are doers, and get shIT done, ages 25-45, who need a quick coffee on their way to work."
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Positioning – Your Brand's Story
What it is: Positioning is about how you want your customers to see your business. It's your brand's unique story. Why should they choose YOU instead of the coffee shop across the street?
Why it matters: In a world with so many options, you have to stand out. Positioning is your chance to tell people what makes you special and why they should care.
Case Scenario: The Coffee Shop’s Story Since you're targeting coffee runners that make shIT happen, you need to tell them why your coffee shop is perfect for THEM. You decide to position your shop as "The Fastest, Most Reliable Espresso Bar in Town." Everything about your business—your name, your signs, your fast service—tells that story.
Your Action Plan:
Find Your Superpower: What's the one thing that makes your business awesome? Is it your hospitality, your super fast service, or the fun atmosphere?
Create a Simple Statement: Write a sentence that tells people what your superpower is. For example, "We are the coffee shop that gives you a high-quality espresso in less than two minutes."
Be Consistent: Make sure your message is the same everywhere. On your website, social media, and even the way you talk to customers.
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The Rise of Allbirds
Company: Allbirds, a shoe company.
How They Used STP: Allbirds didn't try to sell sneakers to everyone. They used STP perfectly.
Segmentation: They looked for humans who cared a lot about the environment and comfort. They didn't target athletes or sneaker collectors.
Targeting: They decided to focus only on this group of humans, the ones who wanted shoes that were comfy, simple, and eco-friendly.
Positioning: They told a clear story: "The world's most comfortable shoe, made from natural materials." Their message was simple, honest, and perfectly matched what their target customers cared about.
The Result: Because they focused on a specific group and told a clear, consistent story, Allbirds became a huge success. They proved that you don't have to sell to everyone, you just have to deeply understand and serve the right people.
The Power of Focus
Starting a business is a big adventure, and you've just learned how to get your map. By using STP, now you have a strategy to start building a smart, successful business.
Remember, the clearer you are about who your customers are and what makes you special, the more your business will grow. Now, it's time to take these steps, apply them to your own great idea, and start your journey!
-Thank you for Reading!
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3 Simple Steps To Apply Concepts
Step 1: Don't Sell to Everyone
Instead of trying to reach a giant, undefined market, use segmentation to divide it into smaller, more specific groups. By understanding who your different potential customers are, you can focus on the people who are most likely to buy from you. This is more efficient and effective than trying to appeal to a general audience.
Step 2: Choose a Target Audience
Once you've segmented the market, you must decide which group to focus on. This is called targeting. By picking a specific group, you can save time and money, and tailor your product and message to perfectly suit their needs. Trying to please everyone often results in pleasing no one.
Step 3: Define What Makes You Unique
Finally, positioning is all about deciding how you want your brand to be seen. You need to create a clear, unique message that tells your chosen audience why they should pick you over a competitor. This "superpower" or unique selling proposition should be consistent across everything you do, from your product to your marketing.