CHAPTER 5:
SEGMENTATION,
TARGETING, AND
POSITIONING
“Right Customer, Right Value, Right Position:
Winning the Market with STP Strategy”
Presented By: DR. SULIZA BINTI ABD RASHID
LEARNING OBJECTIVES
At the end of this lesson, students should be able
to:
Understand market segmentation and target
customers
Explain how companies identify and select
target markets
Understand value proposition and positioning
Apply STP concepts to real-life business
examples
What is STP?
STP = Segmentation + Targeting + Positioning
It is a marketing strategy used to:
Identify different groups of customers
Select the best target market
Position the product clearly in customers’
minds
Simple idea:
Not all customers are the same → Companies
must choose the right customers
5.1 Market Segmentation
Market segmentation means dividing a market into smaller
groups of customers with similar needs or characteristics.
TYPES OF SEGMENTATION:
Demographic Geographic Psychographic Behavioral
age, gender, income location, country lifestyle, personality buying habits, usage
Example of Segmentation
Example: Nike
Nike segments its market based on:
Age (youth, adults)
Lifestyle (active vs casual)
Behaviour (athletes vs everyday users)
This helps Nike design different products for different
customer groups.
TYPES OF MARKET SEGMENTATION
Think of segmentation as:
“Different people, different needs — companies must group them correctly.”
[Link] Segmentation
[Link] Segmentation
[Link] Segmentation Example (Student Life)
[Link] Segmentation A company like Nike:
Targets students and young
1. Demographic Segmentation (Who are you?) adults with trendy sneakers
This is based on basic characteristics of people Targets high-income customers
such as: with premium sportswear
Age
Gender
Simple Understanding
Income
A university student and a working adult do
Education level
not buy the same products in the same
way.
2. Geographic Segmentation (Where are you?)
This is based on location, such as:
Country
City
Climate
Example
Grab:
In Malaysia → focus on food delivery and ride-hailing
In rural areas → may focus more on transport services
Simple Understanding
People in KL, Kuantan, and villages have different needs and
lifestyles.
3. Psychographic Segmentation
(How do you live / think?)
This focuses on:
Lifestyle
Personality
Interests
Values
Example
Starbucks:
Targets people who enjoy a relaxing café lifestyle
Students who like to study in a comfortable
environment
Simple Understanding
Two students may have the same age, but:
One prefers luxury lifestyle
One prefers simple and budget-friendly life
4. Behavioral Segmentation.
(How do you behave / buy?) Simple Understanding
Example Some students:
Shopee: Shop only during sales
This is based on: Targets frequent buyers with Some buy regularly without
Buying habits vouchers waiting
Usage frequency Rewards loyal customers with coins
Brand loyalty and discounts
Specific advantages, value,
or solutions consumers look Attracts deal-seekers during 11.11
for when purchasing a sales
product or service (Benefits
sought)
Simple Takeaway for Students
Good marketing is not selling to
everyone —
It is selling the right product to the
right group of people.
Companies choose target markets
5.1 TARGETING based on:
Market size - refer to the number of potential
Targeting means selecting customers in a market
one or more segments to Profit potential - This is about how much
focus on. profit a company can earn from the market.
Competition - This looks at how many
competitors are already in the market.
Company resources -This refers to what the
company has in terms of:
Money (financial resources)
Skills and expertise
Technology and workforce
Simple idea:
You cannot serve everyone →
choose the best customers
Example of Targeting
Example: Starbucks
Target customers:
Young professionals
University students
Coffee lovers who prefer premium experience
Starbucks focuses on customers who are willing
to pay for quality and experience, not just
coffee.
5.2 Positioning
Positioning means creating a clear image of
a product in the customer’s mind
compared to competitors.
Companies answer:
Why should customers choose this product?
What makes it different?
Mini Case Study: Positioning in Malaysia
1. Milo
Positioning: Energy drink for active lifestyle
Why choose Milo? Gives energy, associated with sports and school activities
What makes it different? Strong connection with Malaysian culture (e.g., Milo truck,
school sports day)
2. Maggi
Positioning: Quick, convenient, and tasty meal
Why choose Maggi? Fast to prepare, affordable, filling
What makes it different? Variety of local flavours (kari, asam laksa), strong emotional
connection (comfort food)
3. Colgate
Positioning: Trusted protection for oral health
Why choose Colgate? Prevents cavities, recommended by dentists
What makes it different? Strong reputation, focus on health and family care
Example of Positioning
Example: Apple
Apple positions itself as:
Premium
Innovative
High quality
Customers associate Apple with status,
design, and advanced technology.
5.2 Value Proposition
A value proposition explains:
Why customers should buy/choose your
product?
It answers/it’s tells customers:
What you offer?
What benefits does the product provide?
How is it better than competitors?
Example of Value Proposition
Example: Grab
Value proposition:
[Link] (transport + food delivery in one app)
[Link]-saving
[Link] payment
Grab provides multiple services in one platform, making
life easier for users.
STP Summary
Diagram
Segmentation → Targeting → Positioning
1. Divide the market
2. Choose the best customers
3. Create a strong product image
Simple flow:
Understand → Select → Influence
Case Study (Malaysia)
Value proposition:
“Always Low Prices”
with wide product
variety
Segmentation:
Families Targeting: Positioning:
Students Middle- and lower- Affordable and
Budget-conscious income groups convenient household
consumers store
Case Study (GLOBAL)
Value proposition:
Sustainable
transportation with
advanced technology
Segmentation:
Environmentally Targeting: Positioning:
conscious consumers Premium customers High-tech, eco-
High-income individuals interested in friendly luxury
innovation cars
Classroom
Discussion
Choose a product you use (e.g., phone, clothing,
food delivery).
Discuss:
1. Who are the target customers?
2. What segment does the product focus on?
3. How is the product positioned?
SUMMARY
In this chapter, we learned:
Segmentation divides the market
Targeting selects the best customers
Positioning creates a strong product image
Value proposition explains why customers should buy
Key idea:
Successful marketing = Right customer + Right value + Right positioning