STP is the marketing framework that stops you wasting money 

Why segmentation, targeting, and positioning are the foundation of effective SME marketing

If there’s one recurring pattern Mark Smith sees when he’s teaching the Help to Grow: Management Course at Nottingham Trent University, it’s this: most SMEs don’t have a marketing problem, they have a focus problem. 

Businesses arrive on the course keen to ‘do more marketing’. They want to try new channels, run campaigns, post more consistently, test paid ads, maybe even hire an agency. But during Module 5, Developing a marketing strategy, Mark makes the case that none of that matters if you haven’t first nailed the foundations: segmentation, targeting and positioning (STP). 

‘If you take one thing away from the marketing section of Help to Grow: Management Course, it’s STP,’ he tells cohorts. ‘It’s the foundation of everything.’ 

Because without STP, marketing becomes guesswork. You might get activity — posts, clicks, leads — but you also create a lot of wastage. The classic line from the old days of advertising is that half of advertising works, you just don’t know which half. Mark’s point is that for SMEs, you can’t afford that mindset. The route to efficiency isn’t just better tactics or tighter measurement, it’s being clear on who you’re aiming at, and why. 

Segmentation: stop trying to sell to everyone 

Segmentation is the process of breaking a market into distinct groups that differ in meaningful ways. It’s not the same thing as creating a persona, and it’s not just demographics. 

Mark often sees business owners fall into a familiar trap. Ask them who their product is for, and the answer is ‘everyone’. But in Module 5, the course pushes leaders to challenge that assumption. 

‘If you’re targeting everyone,’ Mark says, ‘you’re actually targeting no one.’ 

Even the biggest brands with the biggest budgets don’t try to win all of a market with one message. Mark uses Coca-Cola as an example. Coca-Cola doesn’t rely on a single proposition and hope it appeals universally. It builds multiple brands and sub-brands to win different segments, because the market is made up of different types of people who want different things. 

For most Help to Grow: Management Course businesses, budgets are nowhere near that scale. Which makes segmentation even more important. It’s how you avoid spending money speaking to people who were never going to buy from you in the first place. 

A simple way Mark explains it is to imagine a population of 100 potential customers: 

• 60 might be interested in what you sell 
• within that 60, 30 will pay more, buy more often, and stay loyal
• the other 30 might buy occasionally, but only if the price is right  

If you’re putting most of your effort into the second group of 30 simply because they happen to be the ones responding right now, you might be leaving growth on the table. 

Segmentation helps you see those groups clearly and forces a decision about who matters most. 

Targeting: choose the customers who choose you 

Targeting is where the commercial discipline comes in. Once you’ve identified segments, you decide which groups are the best fit for your business. Not just emotionally, but financially. 

This is a theme Mark returns to repeatedly in Module 5: marketing isn’t just a set of communications tasks. It’s a strategic management process. And STP is the tool that turns marketing from ‘doing things’ into making choices. 

Mark has worked with businesses where simply shifting focus from one target group to another improved results without increasing spend. 

The reason is straightforward: the ‘right’ customers are easier to win. They convert at higher rates, repurchase more often, and require less convincing, which improves efficiency across every channel. 

He also warns SMEs about what he calls ‘organic targeting’: assuming your current customer base is automatically your best customer base. 

One business he worked with was selling well to a specific demographic through Facebook groups in a local area. The owners assumed that meant those people were their ideal target market. But in reality, Facebook algorithms had dictated who saw the adverts and geography was incidental because their product could be fulfilled anywhere via Royal Mail. 

Once they stepped back and targeted a different segment that was more naturally aligned to the product, demand increased, without needing a bigger budget. They simply stopped letting the channel define the market. 

A useful phrase Mark shares is: ‘Be big in their world.’ In practice, that means choosing a target segment and building real presence there. The next person outside that segment may never have heard of you, and that’s fine. What matters is being memorable and relevant to the people most likely to buy. 

Positioning: make your offer fit the market 

Positioning is how you frame your value in a way that makes sense to the target segment. It answers the question: why you, and why now? 

In Mark’s experience, a common plateau point for SMEs is misalignment between who they’re targeting and how they’re positioning themselves. The business might be running on strong sales capability — enough to get to 20 employees, a few million in turnover — but then growth flattens. 

When you pull it apart, the issue is often not effort. It’s clarity. 

Mark explains why STP is taught in that order on the course using a simple analogy. If you start with positioning first, you’ve created a ‘square’. Then you do segmentation and targeting, and discover the best opportunity (or audience) is a ‘triangle’. Now you’re trying to force a square through a triangle-shaped hole. 

Do it the right way round, and you build a positioning that fits the segment you’ve chosen. The tactics become much easier because your message has a natural audience. 

This is why, in Module 5, STP is not treated as a business concept, it is the practical bridge between strategy and execution. Get it right, and everything that follows, content, ads, PR, partnerships, sales outreach, becomes more consistent, more efficient, and easier to measure meaningfully. 

A quick STP reset you can do this week 

If your marketing feels busy but ineffective, Mark suggests stepping back before doing more. 

1. List your key customer groups (not personas. Real segments based on behaviour, needs, or value, e.g. 18- to 25-year-old females). 
2. Identify who buys most often, spends most, and stays longest. 
3. Decide who you will prioritise, and who you will stop trying to appeal to. 
4. Rewrite your core proposition in plain language so it fits that target group. 
5. Then choose your tactics, using STP as the filter, not enthusiasm for the newest channel. 

STP won’t stop you running experiments. It will stop you wasting money on the wrong ones. 

And that’s exactly why Mark calls it the most important lesson in the marketing section of Help to Grow: Management Course: Management. In a world where anyone can launch ads in minutes, strategy is the real advantage. 

Latest articles