Segmentation, Targeting, and Positioning (STP) is a framework that appears in nearly every marketing plan. Whether you’re a marketing student writing a campaign strategy or a small business owner trying to attract new customers, you’ve probably encountered it before.
But let’s be honest: sometimes it feels disconnected from reality.
Take the Google Pixel. It suits virtually every smartphone user, so why should we bother segmenting? Isn’t it technically suited to everyone?
Or think about nutritious snacks, isn’t the point to appeal to as many people as possible? Why not just advertise loudly and make everyone hear about the product?
These are fair questions. And if you’ve asked them, this article is for you.
Rather than treating STP as a theoretical checklist, we’ll explore how to make it work in the real world. Think of this less as a textbook exercise and more as a budgeting tool: how can I spend £1,000 on marketing and achieve the best possible return?
By introducing this constraint, we’ll see how STP can become a practical tool, providing meaningful outcomes.
Note II
For innovative products, the Diffusion of Innovation model can help. It segments adopters into Innovators (2.5%), Early Adopters (13.5%), Early Majority (34%), Late Majority (34%), and Laggards (16%). If your product is new to the market, you might want to focus on Innovators: people who are venturesome, risk-tolerant, and eager to try new things. This also shapes your Positioning strategy.
Targeting: Which ones offer the best return
Now that we understand the makeup of our market, the next step is to identify which segment(s) could give us the best return on our limited £1,000 marketing budget. We’re not just asking who could benefit from our product, but rather: which group(s) offer the best fit, lowest cost to reach, and highest return on investment?
Here are some practical criteria to guide that judgment:
Fit
Which segment aligns best with our product’s value proposition?
In the case of sustainable protein powder, we might decide to focus more on female segments. While men may consume more supplements overall, their primary decision drivers often revolve around price and performance. On the other hand, women in certain demographics may place more emphasis on sustainability, which aligns more directly with our product’s unique selling point. Similar reasoning can be applied to income levels and lifestyle choices, segments where sustainability is not just a bonus, but a buying motivator.
Size and Growth
Is the segment large enough, or at least growing, to justify our investment?
Our £1,000 should go toward a group that can generate meaningful engagement or sales, not a niche so small that we never reach critical mass.
Accessibility and Reachability
Can we reach them through communication and distribution channels?
This is critical. Our chosen segment should be present on platforms we can afford to advertise on, and ideally, we should already have or easily build a way to serve them.
Competition
Is this segment already saturated with competitors?
If everyone is targeting the same high-potential group, returns may diminish. Less contested segments can sometimes yield better results.
Taken together, these filters help us narrow down the most viable segments.
Let’s assume, after applying these criteria, we identify our ideal segments as:
- Segment A: Female, 25–38, earning £30k+, works out 3+ times/week, environmentally conscious, lives in the same city as our business.
- Segment B: Female, 18–24, earning £28k+, regular gym-goer, environmentally conscious, lives in a nearby town.
Conclusion: From Framework to Focused Action
STP often feels like just another abstract marketing framework, especially when you’re working on a student project or running a business with limited resources. But once we introduced a real-world constraint (say, a £1,000 budget), the purpose of each step became clearer.
Segmentation helped us understand the landscape. Targeting guided us to focus on where we could maximise the return. And positioning allowed us to speak directly to those who matter most.
In short, we reframed STP from a theoretical exercise into a decision-making tool. It’s not about marketing to everyone; it’s about making every move count. Whether you’re planning a campaign for a client or trying to grow your own business, STP can be a sharp tool as long as it’s grounded in real goals, real people, and real constraints.