Crowded Markets to Sharp Success: Understanding Segmentation, Targeting, and Positioning (STP)

Imagine you’re at an Indian wedding buffet, where there are 50 dishes. You can’t taste them all. What do you do? You focus on the dishes that suit your preferences (maybe the spicy paneer tikka or that irresistible gulab jamun).

In business, customers behave the same way-they’re drawn to what aligns with their needs or preferences.

This is where Segmentation, Targeting, and Positioning (STP) steps in, a framework that’s as relatable as choosing dishes at a buffet but with the power to decide the fate of products and brands.

As someone with years of experience in IT and product management, I’ve seen STP transform “average” ideas into customer-loved solutions. Let’s unpack this with real-life, human-centric examples.

Segmentation: Understanding the Crowd

Think of segmentation like splitting a group of people based on their choices, just like dividing guests at a party into those who love Bollywood music, those who prefer classical, and those who enjoy silence.

In business, segmentation divides a market based on demographics (age, gender, income), psychographics (lifestyle, values), behaviors (purchase frequency), or geography (urban/rural).

Real-Life Example: While working on a product for an e-commerce client, we noticed a wide range of users: some loved deals, some prioritized quality, and others bought impulsively. Instead of building a one-size-fits-all platform, we segmented users. “Deal hunters” got a cashback feature, while “quality lovers” saw premium product recommendations.

In Nutshell- If you speak to everyone, you’ll resonate with no one.

Targeting: Choosing Your Favorite Guests

Once you segment the crowd, you must decide whom to serve. This is targeting. It’s like picking your audience at a stand-up comedy show—you can’t make both a group of teenagers and senior citizens laugh with the same jokes.

Example: A fintech app we worked on segmented users into millennials, working professionals, and senior citizens. Instead of targeting everyone, the client focused on millennials (large market, tech-savvy). They tailored the app’s UI, gamified savings, and offered student loan calculators—all highly relevant features for this group.

In Nutshell-Focus drives results. The narrower your target, the more likely you’ll create a meaningful impact.

Positioning: Making Your Dish Stand Out

Positioning is where the magic happens. It’s about crafting your product’s identity in a way that sticks. What comes to mind when you hear “Swiggy”? Quick food delivery.

What about “Tesla”? Sustainable innovation. That’s positioning becoming unforgettable in your target audience’s mind.

Example: One of the products I part of its launch was a productivity tool in a crowded market. Instead of positioning it as “another to-do list app,” we branded it as “the life organizer for creative professionals.” This specific angle appealed directly to the audience’s pain points, and adoption soared.

In Nutshell- If your product doesn’t own a space in your customer’s mind, it’ll be just noise.

The Human Side of STP: Everyday Analogies

1. Segmentation is like a train reservation system: General class, Sleeper, and AC compartments cater to different passengers.
2. Targeting is when you decide to sell premium coffee only in corporate hubs because you know office-goers will buy it.
3. Positioning is branding that coffee as “the fuel for 9-to-5 warriors” instead of just “coffee.”

Why STP Matters in IT and Beyond In my experience, whether you’re building software, managing a team, or launching a product, understanding whom you’re solving for (targeting) and why your solution is unique (positioning) drives clarity and confidence. Many IT projects fail not due to lack of tech expertise but because they try to cater to everyone-or worse, no one.

STP is not just for marketing textbooks. It’s an everyday tool for life and business. Whether you’re developing a product, pitching an idea, or planning your next move, remember: segment your audience, target with focus, and position with clarity.

It’s simple: Serve the right dish to the right person and ensure they remember it forever.