Hello everyone!

Today we are going to talk about one of the most important basic concepts of marketing- STP which stands for Segmentation-Targeting-Positioning.

Definitions of  STP

Market segmentation:

It is the process of diving a market into distinct subsets, where any subset may conceivably be selected as a marketing target to be reached with a distinct marketing reach

A market can be segmented by the following methods:

  1. Demographic: Characteristics of the customers in terms of age, sex, economic background, etc. are considered
  2. Geographic- Based on the area a person or a group belongs. Some companies also use zip clustering, which is the grouping of zip codes together. For instance, Banjara Hills in Hyderabad and Pali Hills in Mumbai could be clustered together.
  3. Systematic, product related behavior: The purchase behavior of customers, for example, choice of channels, mode of payment, etc.
  4. Cohort analysis: Customers belonging to different generations have different needs

Generations.png5. Benefit sought: Different consumers tend to seek different sets of benefits from the same product.

Different segments seeking different benefits

In the graph above we can see that segment 2 wants excellent durability at a low price, they do not care about the beauty so much. Whereas segment 1 is looking for a beautiful product at a decent price, their durability requirement is low. So it would be a mistake to provide an average product to meet everyone’s requirement.

The concept of lukewarm coffee: Some people like hot coffee, while some like cold coffee. The average of that would be a lukewarm coffee which would not be desired by anyone.



The selection of potential customers to whom a business wishes to sell its product or services. This is the next step after segmentation wherein the segments are measured in terms of their attractiveness and demands and the company’s own capability.

The selection of a particular segment or a group of segments could be depend on the following:-

  • Segment size: The size of the cluster is essential as no company wishes to get into a very niche segment
  • Growth: The future growth rate of the industry
  • Value: The potential value of the segment
  • Stability: Any seasonality or irregularity is not desired by companies
  • Ease of entry: How easily can a company enter the market and the requirement of upfront capital investment
  • Competition: If the competitors are fragmented or saturated and if the competition indulges in price wars

Typically, companies try to plot their competitive advantage and the attractiveness of the segment in order to determine if they are going to target it or not. The graph below helps in making the decision easier.

Market targeting guide


Positioning is the process of defining the value proposition to be implemented through the 4Ps, by clearly defining the following:

  • Target segment: For whom are we making the product?
  • Point of parity: What is our frame of reference??
  • Point of difference: What are the reasons for the customers to buy our product

The role of positioning

Role of positioning

Positioning plays the role of an important pillar of any organizational vision, it impacts product development, and communication, and essentially helps in the product/ and or company branding. We would talk about branding in the next post.



Warm up

Warm up

Hello everyone!

There are more things to learn in marketing than there are people on this planet, and we always wonder about where to start our journey.

This is a series of quick posts on the basics of marketing to help you kick-start your journey.

What is marketing?

Philip Kotler defines marketing as “the science and art of exploring, creating, and delivering value to satisfy the needs of a target market at a profit. Marketing identifies unfulfilled needs and desires. It defines, measures and quantifies the size of the identified market and the profit potential.” But essentially, marketing is just the study of markets.

Sellers’ market

A market where sellers have products, and if customer wants it, they have to reach the sellers. This market is characterized by high volume sales, i.e., sellers try to sell as much as they can. Here the sellers have more power and they practice ‘product-focused or inside-out marketing’. The intuition behind this is to product a stunning product and sell it to all the segments.

Buyers’ market

A market where there are many products and players, and hence the buyers have more power. The sellers here practice ‘customer-focused or outside-in marketing’ and products are developed according to the needs of the customers. The intuition behind this is to segment the customers and, pick and choose the most suitable target group.

Different marketing orientations

The three basic principles of marketing:-

  • Principle of customer value: To provide genuine and authentic value to customers
  • Principle of differentiation: To provide something better than the competition
  • Principle of STP: To segment the customers, target the most suitable group, and then position the product in that particular segment

The four Ps of marketing:-

  • Product: What the seller puts into an exchange
  • Price: What the customer puts into an exchange
  • Promotion: The way the seller communicates the product benefits to the buyers
  • Place: The way the seller delivers the products to the customer

The concept of fair value

Fair value is the amount of value that customers associate with a particular product. It is not a static concept, it keeps changing.

fair value
Concept of fair value

As illustrated in the graph above, the fair value is derived from the balance between the relative cost to the customer, and the relative perceived benefit.

For example, if the former is high, and the later is low, then the customer thinks that the value of the product is inferior, and hence would not buy the product. Typically, sellers like to be in the superior value side of the graph, at any price point.

Market leadership strategies

Strategies for leadership framework

A company can decide to use different strategies for market leadership. This framework serves as a reference point for choosing the perfect strategy among Operational excellence, Customer intimacy, and/ or Performance superiority.

Steps to use the graph:-

  • Determine the product attributes that relate to Operational excellence, Customer intimacy, and/ or Performance superiority in the company’s marketplace
  • Anticipate where fair value is and decide where the company is placed- above, at par, or below fair value
  • Repeat the same exercise for the competition
  • Develop leadership strategies
    • Short term: To at-least meet fair value in all the frontiers
    • Long term: To promote to superior in one, and at-least remain fair value in the others

7 reasons why digital marketing is essential

Hello everyone!

If you are a start-up which is on the cusp of opening shop or a company which falls in the category of late-majority and/ or laggards, still figuring out whether digital marketing is really required or not, go no further.

Today, I am going to give you seven compelling reasons as to why digital marketing is not only crucial but is almost indispensable to the future of any business.

1. The world is going digital– According to Google, there were about 3 billion users online, and that is a 764% increase from 2000. Nearly half of the world, and 34.8% of the Indians are currently online.

digital opportunity

When the entire world is moving towards digitization, digital marketing has become vital for any company or individual who market and sell products and services.

2. Start-ups get a fair chance– Digital marketing helps level the playing field for the start-ups and SMEs by letting them compete against the established companies and attract their own share of the market



3. Digital marketing ROI is countable– In the age of analytics, digital marketing lets us measure success in terms of conversions- be it the traffic directed to the website, number of subscribers, or sale.


4. Better targeting– John Wanamaker, considered to be a pioneer in marketing once famously said that, “Half the money I spend on marketing is wasted; the trouble is I don’t know which half!”


Digital marketing tools helps us segment customers according to their online behavior and target specific groups who might be interested in our product or service.

5. Digital caters to the mobile consumers– According to Think with Google, by 2018 one-third of the entire world would be using smart-phones that, in numbers, is a whopping 2.5 billion!


In India adults on an average use 2 hours and 49 minutes daily on mobile phones- that is more than 5000 minutes a month!

Therefore, it is essential for any business to engage the mobile users and try to entice them to spend as much possible, out of those 5000 hours, on their business.

6. Better engagement with customers– Digital marketing, especially social media helps businesses engage users better than traditional forms of marketing. It allows for a two-way conversation and turns the customers brand loyal by allowing their voices to be heard.


7. Tempts people to take action– Digital marketing allows businesses to incorporate clever ways to entice customers to take favorable action via calls-to-action. A simple advertisement with a buy now button has higher chances of conversion and sale than any traditional form of advertising.


Pictures courtesy –

Important digital marketing terms

Hello everyone!

This is the first post of the blog therefore I am starting with a basic article. Today we are going to have a look at some of the most important terms in the world of digital marketing. This is a comprehensive list of the widely used words, and for the people who want to know just the important ones, can find a video at the end of this post which shows only the nine must-know digital marketing terms.

1. Analytics– It is the discovery, interpretation, and communication of meaningful patterns in data generated by people’s activities online

2. App– Short for application, it is a program designed to be run on mobile devices such as smart phones, tablets, etc.


3. Banner ad – Also known as web banner, it is type of advertising found on websites and applications


4. Blog – A truncation of the expression weblog, is a discussion or informational website consisting of text entries (posts), typically on a specific subject matter

5. Browser – Commonly referred to as web browser, it is a computer program used to access and navigate the internet. Example- Google chrome, Internet Explorer, Microsoft Edge, etc.


6. CPA– Short for cost per acquisition, it is an online advertisement pricing model where the advertiser pays only for a specified acquisition like a sale, click, or form submit

7. CPT – Short for cost per thousand, it is the cost or expense incurred for each potential customer who views the online advertisement

8. CTR – Short for click-through rate, it is the ratio of users who click on a specific link to the number of total users who view a page, email, or advertisement

9. Conversion – Traditionally it meant the conversion of site visitors into paying customers. However, different sites might consider it as an action that the website wants the visitor to perform. Example- Form submissions, phone calls, video views, etc.

10. Conversion optimization– Also known as conversion rate optimization, it is the process of increasing the percentage of visitors to a website that performs a desired action

11. Conversion rate – It is the ratio of the number of conversions to the number of visitors on a website

12. CPC – Short for cost-per-click, it is the amount of money required to acquire a single click on an advertisement online. Sometimes it is also called PPC which is short for pay-per-click

13. Crawler – Also known as a spider, it is an internet bot that systematically browses the web to collect information for indexing, and help searchers find what they are looking for

14. Desktop – A personal computer designed to for regular use at a single location, typically on a desk due to its size and power requirements


15. Domain authority – It is a marking scale used by search engines to determine how authoritative a company’s website is, 1 being the lowest rank and 100 being the highest

16. Digital content – Also known as digital media, it is any content that exists in the form of digital data, such as text, audio, video, images, etc.

17. E-commerce – Short for electronic commerce, it is a transaction of buying and selling online

18. Email marketing – It is the act of sending a commercial message using email to share information and promote products and services, typically to a group of people

19. Home page – Also known as the main or start page, it is the initial page of a website or a browser

20. HTML – Short for hyper-text mark-up language, it is a language used for creating web pages or applications

21. Impressions – The number of times an online advertising is fetched from its source and displayed. Each time an ad is fetched, it is counted as one impression

22. Index – A systematic list of digital content on web pages used by search engines to provide relevant results to the searchers

23. Keyword – A word or a phase that can be targeted by a business as part of their advertising

24. Keyword stuffing – It is the practice of using too many keywords in content in hopes of making it more visible on search engines, however, search engines may penalize a website for doing so

25. Landing page – Sometimes called a lead capture page, it is a single web page that appears in response to clicking on an online advertisement

26. Link – Short for hyperlink, it is a reference to data that the reader can directly follow either by clicking, tapping, or hovering. Like this one- Link.

27. Meta description – It is a few lines of text that appear on the search engine results page just under the title tag


28. Mobile device – Also known as a handheld computer, it is a portable computing device capable pf connecting to the internet, and running applications


29. Organic listing – Also known as natural listing, it is a result from a search engine which are not paid advertisements


30. Paid listing – It is an advertisement that appears on search engine result pages


31. PPC – Short for pay-per-click, it is an internet advertising model used to direct traffic to websites, it which an advertiser pays a publisher when an ad is clicked

32. Query – Also known as search term, it is a keyword or phrase that users search for on an search engine


33. Ranking – It is the position of a listing on search engine results page


34. RSS – Short for Really Simple Syndication, it is a technology that allows users to become subscribers of content and get automatic alerts if updates are made

35. Search engine – It is a software system that is designed to search for information online. Popular search engines include Google, Bing, Yahoo, etc.


36. SEO – Short for search engine optimization, it is the process of affecting the visibility of websites or web pages in a search engine’s unpaid results

37. SEM – Short for search engine marketing, it is a form of internet marketing that involves the promotion of websites, or web pages by increasing their visibility in a search engine’s results, primarily through paid advertising

38. SERP – Short for search engine results page, it is a page displayed by a search engine in a response to a query by a searcher


39. Session – It is a group of interactions that take place on a website within a given time frame

40. Social media – It is a computer mediated technology that facilitate the creation and sharing of content such as texts, images, videos, etc. across the internet


41. Social network – It is a community of individuals who create and share content

42. Subscriber – It is a person who allows a company to send him messages through email or other personal communication means

43. Traffic acquisition – It is the process of acquiring visitors, who are referred to as traffic, to website, applications, and other digital assets

44. Unique visitor – it is a single visitor to a website during a specific period of time

45. URL – Short for Uniform Resource Locator, it is the unique address of a page or piece of digital content on the internet


46. Viral marketing – Also known as viral advertising, it is a marketing technique in which the audience is encouraged to pass on a company’s content to others for better exposure and brand awareness

Please note that this list is not exhaustive, and new terms would be added periodically. So keep following.