Segmenting, targeting, and positioning is another one of those tricky things when planning your business. The gut feeling is, “I’ll be targeting anyone that buys the product. Can’t I wait until it’s in stores before figuring out who that is?” Umm, no. That’s probably not the best option. How will you first attract people to your product? If you’re trying to target the general population, you will be spending money hand-over-fist just to get people to walk down your aisle in the store. If you get them to walk down the aisle, you’ll be spending even more money convincing them to purchase.
Instead, create a very specific target market, and figure out exactly where you want those consumers to place your brand in their minds. You can accomplish this in three easy steps:
Segmenting At this point you’re canvasing the market. You theoretically have no idea who you’re planning to target, and you’re working out all the different ways you could divide the market: demographics, psychographics, lifestyle, geography, or behavior. Describe the cohorts within each of these segmentation categories. If you have done this well, the results should guide you directly to your target.
Targeting What stood out in your segmenting section? Are 18-35 year-old women using similar products 50% more than any other consumer group? Do people in the mid-west with household incomes over $100,000 eat cupcakes 30% more frequently than any other consumers? Ding! Ding! Ding! You’ve found your target.
Positioning Now that you’ve figured out who your target is, consider what you want those people to think about your product and company. Write yourself a positioning statement describing what you want to be and specifically for whom. This statement should be about 10-15 words and clearly describe the 2-3 top benefits of your product for the people you’re targeting.
Put all this together, and you’ve completed the all important STP step. Congratulations!