Segmentation is conducted first, then the selection of one or more target markets and then finally the implementation of positioning. The goal of the STP process is to guide the organization to the development and implementation of an appropriate marketing mix.
Segmentation or market segmentation
The process of splitting a market into smaller groups with similar product needs or identifiable characteristics, for the purpose of selecting appropriate target markets.
Targeting or target market selection
An organization’s proactive selection of a suitable market segment or segments with the intention of heavily focusing the firm’s marketing offers and activities towards this group of related consumers.
Positioning or product positioning is how the product is designed to be perceived in the marketplace by the target market against its main competitors. In other words, it’s basically how consumers understand the product offering and how it differs from similar competitive offerings. Remember Zephyrhills versus Fiji water.