The STP marketing model involves the segmenting, targeting and positioning of products and services by marketers. Segmentation involves the identification of the unique needs of target customers, then dividing the customers into niche markets. Targeting involves customization of marketing messages so that each of the identified market segments receives a marketing message that appeals to it. Product positioning involves the alignment of a company's products with the target market.
A company can segment its target market based on demographics, such as age, income levels and gender. Market segmentation may also be based on personality and behaviors that motivate purchasing decisions, such as leadership traits, attitudes and lifestyles. Segmentation may also occur on the basis of life stages, beliefs and values, geographical location and product benefits.
Market targeting is based the size of the market, which must be big enough to be segmented. Measurable differences must be present between the segments, and future profits must exceed the extra marketing costs incurred due to segmentation.
Product positioning requires that products be aligned with the existing opportunities or gaps in the market through the use of positioning maps. A company's positioning is a guide that helps it build its marketing campaign around a unique benefit or idea.