Understanding Segmentation, Targeting, and Positioning (STP) in Marketing

In marketing, a powerful strategy known as Segmentation, Targeting, and Positioning (STP) helps businesses understand and connect with their customers more effectively. Let's break down these concepts in simple terms and see how Horlicks, a popular health drink brand in India, has successfully used this strategy.

Segmentation: Dividing the Market

Think of the market as a large, diverse group of people. Not everyone in this group has the same needs or wants. Segmentation is about dividing this large group into smaller, more manageable groups of people who share similar characteristics. These smaller groups are called segments.

Why Segment?

• Efficiency: It’s easier to create tailored marketing strategies for smaller groups.
• Effectiveness: Messaging can be more relevant and impactful when targeted at specific groups.
• Focus: Businesses can focus their resources on the most promising segments.

How to Segment?

• Demographics: Age, gender, income, education, etc.
• Geographics: Location, climate, region, etc.
• Psychographics: Lifestyle, values, interests, etc.
• Behavioural: Purchase behaviour, usage rate, brand loyalty, etc.

Targeting: Choosing the Right Segment

Once the market is divided into segments, the next step is targeting. This means selecting one or more segments to focus your marketing efforts on. Not all segments will be equally valuable or accessible, so businesses must choose the ones that offer the best opportunities.

How to Choose?

• Size and Growth: Is the segment large enough and growing?
• Competition: How many competitors are targeting this segment?
• Profitability: Will this segment be profitable?
• Accessibility: Can you reach this segment effectively?

Targeting Strategies:

• Undifferentiated: Targeting the entire market with one offer.
• Differentiated: Targeting several segments with different offers.
• Concentrated: Focusing on a single, specific segment.
• Micromarketing: Tailoring products to suit individual customers.

Positioning: Crafting the Message

Positioning is about creating a distinct image for your product in the minds of your target segment. It’s how you want your customers to perceive your product compared to competitors' products.

Why Position?

• Differentiation: Helps your product stand out in a crowded market.
• Clarity: Clear positioning makes it easier for customers to understand what your product is about.
• Value: Communicates the unique benefits and value of your product.

How to Position?

• Identify Your Unique Selling Proposition (USP): What makes your product different and better?
• Create a Positioning Statement: A concise description of your target market and your product’s unique value.
• Communicate Consistently: Ensure all your marketing efforts consistently convey the same message.

The Horlicks Example: Applying STP in the Indian Market

Horlicks, a well-known health drink brand in India, has effectively implemented the STP strategy to cater to diverse consumer needs. Here’s how they did it:

Segmentation: Dividing the Market

India is a diverse country with many consumer needs and preferences. To effectively market Horlicks, it’s crucial to segment the market into smaller groups with similar characteristics.

Possible Segments for Horlicks:

• Demographics: Age groups (children, teenagers, adults, seniors), gender.
• Geographics: Urban vs. rural areas, different regions (North, South, East, West).
• Psychographics: Health-conscious individuals, busy professionals, and students.
• Behavioural: Frequency of consumption, benefits sought (health, taste, convenience).

Targeting: Choosing the Right Segments

Horlicks targeted each segment with a tailored product to address their unique needs. Here’s how they approached each segment:

Segment	Product	Targeting Strategy
Children	Children’s Horlicks	Focused on parents who are concerned about their children’s growth and development.
Adults	Regular Horlicks	Aimed at individuals seeking general health benefits and energy.
Women	Women’s Horlicks	Targeted women, particularly those with specific nutritional needs like bone health and iron deficiency.
Seniors	Horlicks Lite	Catered to seniors looking for easy-to-digest and health-maintaining drinks.

Horlicks Products

Positioning: Crafting the Message

Horlicks positioned each product to clearly communicate its unique benefits, ensuring that consumers understood how each variant addressed their specific needs.

1. Children’s Horlicks:

   • Positioning Statement: "Children’s Horlicks – Boost Your Child’s Growth and Immunity."
   • Message: Emphasizes essential nutrients like DHA, vitamins, and minerals that support physical and cognitive development.

2. Regular Horlicks:

   • Positioning Statement: "Horlicks – Your Daily Nutrition Partner."
   • Message: Focuses on providing balanced nutrition and energy for daily activities.

3. Women’s Horlicks:

   • Positioning Statement: "Women’s Horlicks – Specially Designed for Women’s Health."
   • Message: Highlights benefits such as bone strength, immunity, and overall wellness, addressing common nutritional deficiencies in women.

4. Horlicks Lite:

• Positioning Statement: "Horlicks Lite – Gentle Nutrition for Seniors."
• Message: Stresses easy digestion and essential nutrients for maintaining health and vitality in older adults

By using Segmentation, Targeting, and Positioning, Horlicks has effectively catered to the diverse needs of the Indian market. Through tailored messages and targeted campaigns, Horlicks has strengthened its brand presence and continues to be a trusted health drink for different population segments. This strategic approach ensures that each group receives relevant and impactful communication, ultimately driving brand loyalty and growth. So, the next time you plan a marketing strategy, remember the power of STP!