GSBS6005 · Principles Of Marketing Strategy
Segmentation, Targeting and Positioning
STP is the strategic spine of every marketing plan: segment the market into similar, viable groups, target the group(s) you can serve best, then position the brand to own a distinct place in the customer's mind relative to rivals. GSBS6005 tests this as application, not recall — naming the right segmentation bases, running candidate segments through the viability criteria, justifying a targeting strategy, and writing an actual positioning statement or reading a perceptual map. It appears in both the open-book mid-term case studies and the final Part B, so the marks live in arguing through the case facts, never in defining the three letters.
What this chapter covers
- 011. STP sequence — segment → target → position, in that order, as a funnel from mass market to focused offer
- 022. Segmentation — dividing a market into meaningful, similar, viable and identifiable groups (segment on wants, not needs)
- 033. Four segmentation bases — demographic, geographic, psychographic (values/lifestyle/AIO) and behavioural (usage rate, benefit sought)
- 044. Segment viability criteria — Sustainable, Measurable, Accessible, Responsive (a neat slice can still fail)
- 055. Niche segmentation — serving one narrow, distinctive segment with a specialised mix (e.g. the Grey Nomads)
- 066. Three targeting strategies — undifferentiated (mass), concentrated (niche) and differentiated (multi-segment), plus cannibalisation risk
- 077. Positioning & competitive strategies — by benefit, user, occasion, against a competitor, or against a category; the positioning statement
- 088. Perceptual maps & repositioning — plotting brands by perceived similarity, judging whether a gap is credible and profitable
STP plan for a new entrant (case study, 12 marks)
- +3Segmentation bases. Slice on demographic (age 25–40, mid-high income), geographic (capital-city metro), psychographic (health-conscious, sustainability values) and behavioural (benefit sought — convenience for professionals vs performance nutrition for athletes). Both candidate segments are primarily psychographic/behavioural.
- +4Apply the viability criteria. Professionals = Sustainable (large) and very Accessible (transit, LinkedIn, delivery) but only moderately Responsive (many rival convenience meals). Athletes = smaller but highly Responsive and Accessible via gyms, clubs and sports media — a well-defined niche.
- +3Targeting strategy. For a budget-constrained launch, recommend concentrated (niche) targeting on the athlete segment: a focused, responsive niche beats spreading a thin budget across two segments (differentiated) and positioning weakly in both. Plan to expand to professionals once the brand has traction.
- +2Positioning statement. "For endurance and gym athletes who need clean fuel on the go, VerdeFuel is the plant-based ready meal that delivers complete recovery nutrition with no artificial additives, because it is formulated with sports dietitians and macro-labelled per serve." — names target, frame of reference, point of difference and reason to believe.
Key terms
- STP
- The strategic sequence of Segmentation (divide the market), Targeting (choose which segments to serve) and Positioning (engineer a distinct place in the consumer's mind relative to rivals).
- Market segmentation
- Dividing a market into meaningful, relatively similar, viable and identifiable groups so each can be served with its own marketing mix; markets are segmented on wants, not needs.
- Segmentation bases
- The four families of variables used to slice a market — demographic (age, income, life-cycle), geographic (where they live), psychographic (values, lifestyle/AIO) and behavioural (usage rate, loyalty, benefit sought).
- Benefit segmentation
- A behavioural base that groups customers by the specific advantage or benefit they want from the product, rather than by who they are — strong at explaining why people buy.
- Segment viability criteria
- The four tests a useful segment must pass — Sustainable (large/profitable enough), Measurable, Accessible (reachable via media and channels) and Responsive (reacts differently and favourably to a tailored mix).
- Niche segmentation
- Serving one narrow, distinctive segment with a specialised mix instead of the mass market — profitable when the segment is under-served and willing to pay (e.g. the Grey Nomads).
- Targeting strategies
- Undifferentiated (one mix for the whole market), concentrated/niche (one specialised mix for one segment) and differentiated/multi-segment (several mixes for several segments, with cannibalisation risk).
- Positioning
- The distinct place a brand holds in the consumer's mind relative to competitors on the attributes buyers care about; you aim it with the mix, but it forms in the customer's head.
- Perceptual map
- A two-axis plot of brands derived from consumers' similarity judgments — brands plotted close are perceived as similar, and gaps (white space) are potential opportunities to be tested for credibility and profitability.
- Repositioning
- Deliberately shifting a brand's perceived position in response to market change; risky and sometimes reversed (e.g. Reebok's 'Be More Human' relaunch and logo change).
Segmentation, Targeting and Positioning FAQ
What is STP and why does the exam care so much?
STP is Segmentation, Targeting and Positioning — the sequence that turns a whole market into a focused, clearly positioned offer. GSBS6005 examines it heavily because it is application-heavy: the mid-term Part II case studies name 'segmentation and targeting' directly, and it recurs in the final Part B. Marks come from applying it to a real (usually Australian) brand, not from defining the three letters.
What are the four segment viability criteria?
A segment must be Sustainable (large and profitable enough to be worth serving), Measurable (you can identify and quantify it), Accessible (you can reach it with media and distribution) and Responsive (it reacts differently and favourably to a tailored marketing mix). Forgetting these is a favourite short-essay; a demographically neat segment still fails if it is not accessible or responsive.
How do I choose a targeting strategy?
Match the strategy to resources and the segment structure. Undifferentiated (one mix for all) suits commodity-like goods; concentrated/niche (one specialised mix) suits smaller firms and limited budgets; differentiated/multi-segment (several mixes) suits resourced firms wanting reach — but always name its cannibalisation risk, where a new variant eats your existing sales rather than winning new buyers.
How do I read a perceptual map for marks?
Plot brands on two attribute axes from how customers perceive them; brands close together are seen as near-substitutes, and an empty quadrant is white space. The marks are in judging whether that gap is credible and profitable — an empty space may be empty for a good reason (no demand, or a contradictory position like 'luxury at cheap prices'), so only recommend filling it with a genuine cost or capability advantage.
What is the difference between segmentation, targeting and positioning?
They are distinct steps students often blur: segmentation describes the market (it divides buyers into groups), targeting chooses which group(s) to serve, and positioning is the perception you engineer in the customer's mind relative to rivals. A complete answer keeps the three separate and shows how each feeds the next.
Is this study guide official or affiliated with the University of Newcastle?
No. AskSia is an independent study resource and is not affiliated with, endorsed by, or produced by the University of Newcastle. Always confirm assessment details and rules against your official Canvas course outline.
Exam move
Treat STP as a four-move drill you can run on any unseen Australian brand in minutes: name the segmentation bases (combine demographic with psychographic/behavioural), screen each candidate segment against the Sustainable–Measurable–Accessible–Responsive criteria, recommend and justify one of the three targeting strategies (and name the cannibalisation risk if you go multi-segment), then write a four-part positioning statement and, where asked, read a perceptual map for a credible, profitable gap. Practise in full argued prose rather than bullet points, because the lecturer penalises lists and fact-rehashing, and rehearse linking your STP choices forward to the 4 Ps so a case-study answer reads as one logical argument from segment to mix.
