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The STP Approach and Cluster Analysis
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The STP Approach and Cluster Analysis‘Selling your Products / Services to the
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SOSTAC Reference
What is Strategic Marketing?
Strategic marketing consists of:
• Analysing the business environment and defining specific customers and their preferences
and needs.
• Matching activities / products to customers segments.
• Implementing marketing programmes that achieve a competitive position that is superior to
competitors i.e. competitive advantage.
(Source: Isobel Doole, Robin Lowe ‘The Official CIM Coursebook: Strategic Marketing Decisions 2008-
2009’)
The STP Model / Approach
Segmentation, Targeting, and Positioning
Segmentation:
• Market segmentation can be defined as the process of splitting a market into smaller groups
with similar product needs or identifiable characteristics, for the purpose of selecting
appropriate target markets.
• Behavioural, Psychographic and Profile Factors.
, Targeting:
• Targeting refers to determining which, if any, of the segments uncovered should be targeted
and made the focus of marketing efforts.
• Undifferentiated, differentiated, focused / concentrated, and customised marketing
strategies.
Positioning:
• After making a decision / finalising your marketing strategy, you then position your product /
service; giving your targeted customers a reason to buy it.
Step 1: Segmentation
Identifying Consumer Markets
Behavioural Factors
Behavioural segmentation is defined as the act of grouping customers based specifically on how they
act as consumers when making purchasing decisions.
Types of behavioural segmentation:
• Customers are segmented on the basis of the benefits sought from purchasing a specific
product e.g. regarding toothpaste, customers could buy it to have whiter teeth or protect
their sensitive teeth.
• The occasion / timing when customers purchase, use, or think of buying a product e.g. cereal
advertisements encourage consumers to eat breakfast cereals on the occasion of getting up.
However, consumption patterns can be changed by targeting occasion. The same cereal
could be promoted as an anytime snack food.
• Usage rate divides customers according to the level they use the product. Users can be split
into heavy, medium or light users e.g. for beauty products, heavy users will use and buy eye
shadows and lipsticks quite often while light users will buy them rarely. The objective of an
organisation should be to attract heavy users who will make a greater contribution to sales.
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