Use the STP Model to Enter a New Market Perfectly

Identifying a target market is a must in order to have a successful business. Instead of trying to sell your product to everyone, you try to sell directly to a specified group of people who will probably buy your product.

Following the segmentation, targeting, and positioning (STP) model will make your marketing more effective and efficient. There are still other factors that affect your success or failure in the market, but these three concepts play a big role in entering the market correctly.

Segmentation

A common mistake by recent businessmen is trying to satisfy everyone. If you’re trying to convince all consumers of your products or service, you’ll definitely fail because consumers needs are diverse.

Geographical distribution of residents can be used to segment markets. For example, a clothes company may sell different clothes in a cold place in comparison to other dry or warm places. Companies that strategize to sell clothes that fit the local weather are more likely to succeed.

Demographic distribution is also used frequently used in commercial operations, it clarifies the potential buying habits of the targeted customers. With returning to the example of the clothing company, it’s unlikely that customers in their 20s and 30s will buy the same clothes made for customers in their 60s, trying to sell to all demographics would be a waste of time and money.

Buying behavior, usage, and the consumer’s financial capacity also must be studied closely, an expensive product cannot be shown in low-income areas. 

Targeting

After specifying a group of customers, the next step is to eliminate groups that won’t be profitable for your business.

Which groups do you think will give a better return on investment? It’s not just about the group you’re focusing on, but also on the financial resources on the targeted group to avoid any losses.

Positioning

In this last step, you’ll find out how to market your product efficiently to your targeted groups. What makes your product different than the rest of the market? Is it more affordable or of a higher quality?

To stand out among competitors, you must specify the points of difference and qualities that only exist in your product and other points of similarity to other products. Consider the reason clients buy your product instead of the competitors’ through your unique selling proposition, and a map of targeted locations to understand how each group sees your product or service.

Regardless of what you’re trying to sell, the STP Model is a great way to find a perfect market for you.

Photo credit: Brandingmag

This article was translated by Noura Shibl