Segment the market
Group customers on differences related to needs, behaviour, context or economics. Document the variables, data quality and groups that the rule does not classify well.
- Segmentation variables
- Observed differences
- Unclassified cases
05 · STP framework
Segmentation, targeting and positioning: connect three decisions
WHAT TO CHECK
A traceable chain from segment evidence to target choice and proposition test.
- 01Use observable differences that matter to the decision or offer.
- 02Select targets against capacity and economics, not only preference.
- 03Test whether the proposed position is relevant, credible and differentiated for the chosen target.
Choose a target
Select an addressable group using opportunity, access, capability and cost-to-serve evidence. State what is intentionally not targeted and why.
- Target rationale
- Access path
- Exclusions
Formulate and test the position
Express the promised value, comparison frame and proof. Check it with customers and competing alternatives before using it as a market fact.
- Value claim
- Reasons to believe
- Customer test
VALIDATION DOSSIER
State the decision contract
Use the question “Which customer groups are meaningfully different, which will we serve, and what credible position will we occupy?” as a contract: name the owner, deadline, scope and alternatives before collecting more material. Segmentation describes heterogeneous demand; targeting allocates effort; positioning states a distinctive, credible reason to choose. Treating the three as one exercise conceals important trade-offs. Record what is deliberately outside scope, who can challenge the framing and what consequence follows from postponement. This prevents an attractive framework, actor list or market story from silently replacing the decision that the analysis is meant to support.
- Owner and deadline
- Comparable alternatives
- Explicit boundary
- Cost of delay
VALIDATION DOSSIER
Build an inspectable evidence register
For every material statement, retain the original source, publication date, observation period, method, unit and relevant population. Distinguish observed facts, calculated estimates, interview judgements and assumptions. Connect the register to the promised output: A traceable chain from segment evidence to target choice and proposition test. Missing or contradictory evidence remains visible with a responsible owner and a collection action; it is never converted into certainty merely to complete the page.
- Primary source
- Method and unit
- Confidence
- Evidence gap
VALIDATION DOSSIER
Apply one operating convention
Define the rules before applying the analysis: inclusion criteria, identifiers, comparison set, calculation or coding convention, treatment of missing values and version date. Reproduce the same convention across every option or actor. Use the page checks as acceptance tests, beginning with “Use observable differences that matter to the decision or offer.” A conclusion is usable only when another practitioner can reconstruct how the inputs became the displayed result and identify where judgement entered.
- Stable definitions
- Common comparison
- Versioned inputs
- Reproducible transformation
VALIDATION DOSSIER
Test uncertainty and rival interpretations
Challenge the preferred interpretation with at least one plausible alternative, contradictory observation and sensitivity test. Separate association from prediction and never infer intent, power or causality from a position, score or visual proximity alone. The standing limit remains: A positioning statement is a hypothesis about perception; it does not establish that customers will believe or buy it. State which uncertainty is most likely to reverse the conclusion and what additional observation would discriminate between the competing explanations.
- Alternative explanation
- Counterevidence
- Sensitivity
- Decision-changing uncertainty
VALIDATION DOSSIER
Record the action and reopening rule
Turn the analysis into a dated decision record rather than a static page. Preserve the selected option, rejected alternatives, objections, accepted risks and first reversible action. Name the signal, numerical or qualitative threshold, review owner and review date that will confirm, adapt, pause or reopen the decision. Link every later update to its author and reason so that the history remains understandable when evidence or market conditions change.
- Decision trace
- First reversible step
- Review threshold
- Named owner
LIMIT
A positioning statement is a hypothesis about perception; it does not establish that customers will believe or buy it.
- UK Government, The Green Book (opens in a new tab)Reference for explicit options, assumptions and evidence-led appraisal.
- OECD, Consumer Policy Toolkit (opens in a new tab)Reference for consumer information, choice context and evidence.