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STP vs STDP: What’s the Difference?
STP (Segmentation, Targeting, Positioning) and STDP (Segmentation, Targeting, Differentiation, Positioning) are both foundational frameworks in marketing strategy. They guide marketers in identifying, selecting, and addressing market segments effectively. While they overlap significantly, the inclusion of “Differentiation” in STDP highlights a more explicit focus on how a brand or product sets itself apart from competitors.
Breaking Down the Acronyms
STP (Segmentation, Targeting, Positioning):
This process involves:
- Segmentation – Dividing the overall market into smaller, more homogeneous groups based on characteristics like demographics, psychographics, behaviors, or geographic factors.
- Targeting – Selecting one or more market segments to focus marketing efforts on, based on factors like segment attractiveness, fit with the firm’s resources, and competitive advantage.
- Positioning – Crafting a unique place in the minds of the target audience by communicating the brand’s key benefits, features, and value proposition.
STDP (Segmentation, Targeting, Differentiation, Positioning):
This approach adds Differentiation as a distinct step:
- Segmentation – Identical to STP.
- Targeting – Identical to STP.
- Differentiation – Highlighting the unique attributes or benefits of the product or brand that distinguish it from competitors. This step emphasizes building points of difference (POD) that resonate with the target market.
- Positioning – Aligning these differentiators into a cohesive message that establishes the brand’s value in relation to competitors.
Why Include Differentiation Explicitly in STDP?
Differentiation is always part of positioning. However, its inclusion as a distinct step in STDP is primarily for clarity and emphasis.
- Textbook Approaches: Some marketing texts, such as those by Kotler and others, explicitly separate differentiation to emphasize its importance in crafting competitive strategies. This distinction serves to ensure marketers give focused attention to identifying and building unique selling points (USPs) or competitive advantages before finalizing positioning.
- Clarity in Complex Markets: As markets grow more saturated and competitive, differentiation plays a critical role in ensuring that a brand stands out. By separating it as a step, STDP highlights that marketers should first define how their offering is different before deciding how to position it in the market.
- Improved Strategic Focus: The STDP model helps firms prioritize differentiation strategies, ensuring that their positioning has a unique appeal that resonates with the target market.
Are Differentiation and Positioning the Same?
No, but they are interdependent.
- Differentiation:
- Focuses on the unique features, benefits, or attributes that set a brand/product apart from competitors.
- Answers: “What makes our offering different and better?”
- Differentiation is rooted in the product or brand’s intrinsic attributes, such as quality, features, price, customer service, or brand image.
- Positioning:
- Refers to how these differentiators are communicated to and perceived by the target audience relative to competitors.
- Answers: “How do we want customers to perceive our brand?”
- Effective positioning synthesizes the differentiators into a compelling message that aligns with customer needs and competitive dynamics.
Interconnection:
Differentiation is the foundation of effective positioning. Without differentiation, positioning becomes generic and fails to resonate in a competitive market. For example:
- A car brand differentiates itself by offering “superior fuel efficiency.”
- This differentiation feeds into its positioning as “the most eco-friendly choice for modern families.”
Key Takeaways
- STP and STDP are variations of the same process; STDP adds an explicit differentiation step to highlight its role in crafting effective positioning.
- Differentiation ensures positioning success by providing compelling reasons for consumers to prefer one brand over competitors.
- Effective positioning always includes differentiation, while ineffective positioning lacks clear differentiation and may result in a “me-too” market perception.
- The choice between using STP or STDP depends on how much emphasis is needed on creating competitive distinctions before finalizing positioning. In highly competitive or cluttered markets, STDP can provide more strategic focus.
Therefore, effective positioning ALWAYS includes clear differentiation, whereas ineffective positioning is not differentiated.
Points-of-Parity and Points-of-Difference
To make more sense of positioning, it is important to understand the distinction between points-of-parity (POPs) and points-of-difference (PODs). Effective positioning is made up of both POPs and PODs, as opposed to ineffective positioning which just has POP’s (without differentiation).
For POPs, we need to have aspects of our positioning similar to our key competitors on attributes and benefits that are important to our target market consumers. And for our PODs, we need to have key and important differences between us and our competitors.
The following ad for the Burger King flagship product the “Whopper” is a good example of positioning using a key point of difference.
While both Burger King and McDonald’s have the following POP’s: a range of burgers, fries, and sodas, lots of locations, family oriented, convenience and fast service, seating and parking options, and so on – which are all important attributes to the target market consumers.
However, Burger King differentiates its offering on size of their Whopper – creating a clear point of difference between them and McDonald’s, on attribute that would be quite important to some target market consumers, which should result in enhanced market share.
In Conclusion
The two processes of STP and STDP refer to exactly the same process of moving from segmentation, to targeting, to effective positioning.
However, the inclusion of the D (standing differentiation), just helps highlight that a key component of an EFFECTIVE positioning MUST include differentiation.
Most/all marketers would be aware of the importance of differentiation when constructing their positioning, so the steps of STP should be sufficient to work through the process. However, for marketing students and relatively new marketing practitioners, the reminder of the important to differentiation in the letters STDP is helpful.
Helpful Explanation Video
Related Articles
- Understanding the STDP process in marketing
- Points-of-Difference and Points of Parity
- Points-of-Difference and Points-of-Parity Examples
