“Describe the concept of the STP (Segmentation, Targeting, Positioning) -model and its benefits to a company.
Apply a full STP-analysis to Minnesota Micromotors Inc. In your analysis answer the following points:
– Who are MM’s target customers?
– Are all segments equally attractive to MM? Yes/No-Why?
– How do the needs and expectations of customers evolve over time?”
In an increasingly competitive world ,for organisations and companies to remain relevant, succeed and be profitable. Segmentation, Targeting and Positioning are the weapons needed to continuously gain market share and build competitive advantage It is a means of building gainful customer relationships (Kotler,P.and,Armstrong,G.2014.p.26) and identifying virgin markets and groups hitherto not served by competition. Customers and Consumers as individuals or groups have differing needs,preferences,likes and perceptions based demographics,geographic,lifestyle and behaviour where similar products and services can not satisfy. The science of putting together individuals,groups and organisations according to similar needs is market segmentation (Dibb,Sally. et al. 2012.p.212).This stage helps companies to target this identified groups with tailored products that suit their needs.It additionally aids companies to utilise its resources efficiently effectively and strategically blend its marketing mixes to its optimum.
Targeting is when an organisation or companies after careful analysis chooses a segment it wants to sell to or focus on with specific offer or service. As defined by Doyle and Stern (2006) it considers the spending patterns of the customer and the capability of the company to satisfy those needs. Targeting helps companies to be certain about where it can market its products and the pricing decisions (Jobber ,D.,Ellis-Chadwick, F.2013.p.596)
Positioning is the perceptional view by a customer, of a particular product in comparison with competing products with respect to the physical and emotional attributes. Positioning is based mostly on attribute, price, quality, use or application, product user, product class, competitor or emotion, according to Lamb, Hair and McDaniel (2009).