STP in marketing stands for segmentation, targeting, and positioning. These three basic steps dictate how marketers can identify the right customers, serve them the right messaging, and give them the information they need for successful targeting.
Segmentation involves dividing your broader market into smaller, more manageable groups based on shared characteristics, needs, or behaviours. Rather than trying to appeal to everyone, segmentation helps you understand the different types of customers who might buy from you. This might be segmenting by demographics, geographic location, business size, or buying behaviour. For Australian SMEs, effective segmentation often reveals opportunities to serve specific customer groups more effectively than larger competitors.
Targeting is about selecting which segments represent the best opportunities for your business. Not all segments are created equal – some might be more profitable, easier to reach, or better aligned with your capabilities. Through our work at Ronin, we’ve found that many businesses try to target too broadly and end up with diluted messaging that doesn’t resonate strongly with anyone.
Positioning involves crafting how you want your selected target segments to perceive your brand relative to competitors. This isn’t just about slogans or taglines – it’s about the entire customer experience and value proposition you deliver. Your positioning influences everything from your web design and content marketing to your pricing strategy and service delivery.
The STP process is described as consumer-centric, enabling businesses to deliver more relevant, personalised messaging that resonates with specific audience groups. Instead of generic marketing that tries to appeal to everyone, STP helps you create focused campaigns that speak directly to your ideal customers’ needs and preferences.
What makes STP particularly valuable is how it enables hyper-personalisation and enhanced audience engagement. When you understand exactly who you’re trying to reach and how you want to be perceived, every piece of marketing becomes more focused and effective. Your Google Ads campaigns can target specific segments, your SEO strategy can focus on keywords your targets actually use, and your social media marketing can speak their language.
The systematic approach helps ensure your digital marketing strategy delivers the right messaging to the right audience at the right time. Research shows that businesses using structured STP approaches typically see better campaign performance and stronger customer relationships because their marketing feels more relevant and valuable to recipients.
STP also provides a foundation for marketing strategy development by ensuring all tactical decisions support your positioning goals and target audience needs. When implemented correctly, it helps businesses compete more effectively by focusing resources on the most promising opportunities rather than spreading efforts too thin.
