Market segmentation is the segmentation of markets into homogenous

groups of customers, each of them reacting differently to promotion,

communication, pricing and other variables of the marketing mix. Market
segments should be formed in that way that differences between buyers
within each segment are as small as possible. Thus, every segment can
be addressed with an individually targeted marketing mix.

Market segmentation and the identification of target markets, however,

are an important element of each marketing strategy. They are the basis
for determining any particular marketing mix.

The first aspect of marketing segmentation is to find the "category of

need" that the company, service, or product will fulfill. There are three
fundamental characteristics that define the "category of need", they
include the following:

• Strategic - this category must define the product the company is

offering and why it is important to the mission, objectives, or
operations of the consumer.
• Operations - this category must fulfill the general operating
procedures of a company and align with its procedures.
• Functional - the final approach is to define the function need a
customer has for a product. The product or service must deal with a
specific process such as accounting, maintenance, etc. There are
several domains for the functional aspect of market segmentation,
but it must be defined with the prospective audience in min

Targeting:

Choosing an appropriate market for a given product. Marketers of a given

product need to evaluate the different market segments and decide which
and how many to serve.

There are three targeting options an organisation can adopt.

Option 1

Undifferentiated marketing - Sometimes referred to as mass

marketing the firm may decide to aim its resources at the entire market
with one particular product. One product aimed at the mass market in the
hope that a sufficient amount of buyers would be attracted.
Option 2

Differentiated marketing strategy - Where the firm decides to target

several segments and develops distinct products/services with separate
marketing mix strategies aimed at the varying groups. An example of this
would be airline companies offering first, business (segment 1) or
economy class tickets (segment 2) , with separate marketing programmes
to attract the different groups.

Option 3

Concentrated Marketing: Where the organisation concentrates its

marketing effort on one particular segment. The firm will develop a
product that caters for the needs of that particular group. For example
Rolls Royce cars aim its vehicles at the premium segment, same as
Harrods within the UK.
Positioning:

In marketing, positioning has come to mean the process by which

marketers try to create an image or identity in the minds of their target
market for its product, brand, or organization.

The marketing mix and the 4 Ps of marketing are often used as synonyms
for each other. In fact, they are not necessarily the same thing.

"Marketing mix" is a general phrase used to describe the different kinds of

choices organizations have to make in the whole process of bringing a
product or service to market. The 4 Ps is one way - probably the best-
known way - of defining the marketing mix

The 4Ps are:

• Product (or Service)

• Place
• Price
• Promotion

Importance of STP in marketing:

1.STP helps in reduction of product cost and profit maximisation.

2.It improvises your market position.

3.It makes you more competitive.

4.Helps in creating demand of the product in the market by increasing the

willingness to buy.

5.Sales depends entirely on how the segmentation of market has been

done. And etc.