Segmentation, Targeting and Positioning (STP) for B2B: Model and Walkthrough

At the start of 2025 there were about 258,500 private sector businesses in the UK employing between 10 and 249 people. That's 220,085 small employers and 38,435 medium-sized ones, according to the government's business population estimates.

If you sell to established businesses, that's your "everyone". Nobody can market to all of them well, and most shouldn't try.

That's the job STP does. Segmentation, targeting and positioning is an old model, and it's taught in every marketing course for good reason. It forces you to decide who you're for before you decide what to say. This guide covers how it works for B2B, where B2B differs from the textbook consumer version, and a worked example you can copy.

What the STP Model Is

STP is a three-step marketing model: segment, target, position. It's widely taught through Philip Kotler's textbooks, including Principles of Marketing with Gary Armstrong.

The logic is simple. No offer suits every buyer equally. So you decide deliberately who you'll serve and how you want them to see you, instead of trying to appeal to everyone and convincing nobody.

Each step narrows the next. Segmentation describes the market. Targeting is the choice. Positioning is what you say, and prove, to the group you chose. Skip a step and the later ones get vague. That's how you end up with a website that says "we help businesses grow".

Why Focus Matters More in B2B

B2B buyers ignore suppliers who don't seem to understand them, and they shortlist early. Both make a clear target worth more in B2B than in most consumer markets.

Start with relevance. In a Gartner survey of 632 B2B buyers published in June 2025, 73% said they actively avoid suppliers who send irrelevant outreach. You can't be relevant to a group you haven't defined.

Then timing. Peter Weinberg and Jon Lombardo of LinkedIn's B2B Institute described what they called the 95:5 rule in a 2021 Marketing Week column. Based on work with Professor John Dawes of the Ehrenberg-Bass Institute, they wrote that "only 5% of B2B buyers are in-market to buy right now."

Put those two together and the case for targeting gets sharper. Most of your target segment isn't buying today. When they do start, 6sense's 2025 buyer survey found they evaluate about five vendors and buy from their day-one shortlist 95% of the time. So the companies that win are the ones a specific group already thinks of as "for people like us". A broad, vague target makes that very hard.

Segmentation: Segment Types for B2B

B2B segmentation splits possible buyers into groups that need different things or buy in different ways. The classic consumer bases are geographic, demographic, psychographic and behavioural. B2B companies usually work with these instead:

Firmographics are where most teams start, because the data is easy to get. Here's how the UK's employing businesses split by size. It's a reminder of how quickly the numbers fall away as companies get bigger.

Size alone rarely predicts who'll buy, though. The best-known B2B answer to that comes from Benson Shapiro and Thomas Bonoma. In How to Segment Industrial Markets (Harvard Business Review, 1984) they set out five criteria "arranged as a nested hierarchy", from the outside in: "demographics, operating variables, customer purchasing approaches, situational factors, and personal characteristics of the buyers."

The outer layers are easy to see. The inner ones, like how a company buys, what's happening to it right now, and who the decision-maker is as a person, take more digging but usually predict buying better. Shapiro and Bonoma were also practical about it. They wrote that "it may not be necessary or even desirable for every industrial marketer to use every stage of the nested approach for every product." Go as deep as the decision needs.

Segment by Need and Situation as Well as Size

Two firms of the same size in the same sector can want completely different things. Needs-based segmentation groups buyers by the problem they're trying to solve and the situation they're in.

Clayton Christensen's "jobs to be done" idea is the clearest way into this. In Know Your Customers' "Jobs to Be Done" (Harvard Business Review, 2016), Christensen and his co-authors argue that "the circumstances in which customers try to do them are more critical than any buyer characteristics." In B2B terms, a firm that's just lost a big client and a firm preparing for an audit might buy the same service for very different reasons, and respond to very different messages.

This short clip is the famous milkshake example. It's a consumer story, but the lesson carries straight over: describe the job and the situation, and the market can look very different from the one you'd sized by customer profile.

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Needs-based segments also make research easier. You stop writing a persona for every job title and start grouping people by what they're trying to get done. One product marketer described doing exactly that, after hearing April Dunford's advice on a podcast:

That's a second-hand summary of Dunford's view, so take it as one person's reading. I think the principle's right, though. Segments should be groups you can act on differently, and a pile of personas often isn't.

Targeting: Choosing the Segment to Lead With

Targeting is the decision about which segments you'll serve, and with how many distinct offers. Kotler and Armstrong describe four broad strategies:

• Undifferentiated. One offer for the whole market. Rare and risky in B2B.
• Differentiated. Several segments, each with its own offer or message. You need the resources to serve each one well.
• Concentrated (niche). One segment, served deeply. Usually the right start for a smaller B2B company.
• Micromarketing. Tailoring to individual accounts or locations, as in account-based marketing.

To choose, score each segment on five things: size and profitability, how well you can serve it, the evidence you already hold (wins, retention, referrals), how easy it is to reach, and how crowded it is. A market positioning map helps with that last one.

The best evidence usually sits in your own customer list. Take your last 20 or 30 clients and group them by sector, size and the trigger that made them buy. Then look at which groups stayed longest, paid the most, needed the least hand-holding and referred others. A segment that scores well on all four is telling you something. A segment that looks large on paper but barely shows up in your client list is a hypothesis, and it needs testing with real buyers before it becomes your target.

Pick the segment where you have evidence of winning, not the biggest one. Size is tempting. Proof is what closes deals.

The case for niching down shows up all the time in practitioner forums. This post puts the reasoning simply:

A narrow target can feel like turning work away. In practice it mostly changes who hears your message first. You can still take a good client from outside the segment. You just don't build your website around them.

Mark Ritson makes the wider point well in this conversation with Dreamdata: most B2B marketing starts in the wrong place, with tactics before diagnosis. STP is the bit that should come first.

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Positioning: Turning the Target Into a Statement

Positioning is where STP becomes usable. It's a short statement of who the offer is for, the need it meets, the category, the main benefit and the proof, written for the chosen target only.

April Dunford's definition, from her website, is a good check: positioning "defines how our product is different and better than alternatives for a particular set of customers." That "particular set of customers" is your target. If the statement would work just as well for every segment, it isn't finished.

Use the positioning statement template to write it, and see B2B positioning for established companies for how to test and roll it out. If you want a quick self-check first, the free Positioning Probe scores your positioning across market, buyers, competitors and trends.

Does AI change any of this? Dunford's short answer, in her talk at Mind the Product London in 2026, was no. Her longer answer is that it creates lots of new ways to get it wrong.

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Which Comes First: Segmentation or Targeting?

Segmentation first, then targeting, then positioning. You can't choose a target until you can see the segments, and a position only means something for a specific target.

In practice the steps loop. Positioning work often shows that a segment should be split or merged. A segment that looked attractive turns out to be impossible to reach. Revisit segmentation when the evidence says so, rather than defending the first version.

STP Walkthrough for a B2B Services Firm

Illustrative example: a fictional IT support firm with 40 staff, used only to show the method.

1. Segment the market. Split possible buyers into groups that need different things or buy differently, using firmographic, needs-based and behavioural variables.
2. Evaluate each segment. Score each segment on size, profitability, how well you can serve it, the evidence you already hold and how crowded it is.
3. Choose your target. Pick one segment to lead with (or a small number with distinct offers) and write down why the others wait.
4. Position for the target. Write a positioning statement for the chosen segment: who it is for, the need, the category, the benefit and the proof.
5. Test and roll out. Test the position with buyers in that segment, then align the website, deck and sales conversations to it.

• Segments found: small offices of any type, regulated professional firms (legal, accountancy) with compliance needs, multi-site retailers, and start-ups.
• Evaluation: regulated professional firms stay longest, pay more and refer peers. The firm already holds the relevant certifications.
• Target: concentrated, on regulated professional firms with 10 to 100 staff in the South East.
• Position: "For law and accountancy firms that must show clients their data is secure, we're the IT support partner that keeps you audit-ready, because our certifications and reporting are built for your regulators."
• Test: read it to recent clients in that segment, use it in the next ten sales calls, and track the meeting-to-proposal rate against the old message.

Notice what the firm didn't do. It didn't drop its other clients. It changed who the website, the deck and the first sales call are written for. If you're unsure whether the chosen segment really wants the offer, run a market validation check before rebuilding anything.

Common STP Mistakes

• Segments nobody can act on. Groups you can't find, reach or price for differently aren't useful segments.
• Targeting by ambition. Choosing the biggest segment over the one where you have evidence of winning.
• Too many targets. A differentiated strategy without the resources to serve each segment well.
• Positioning for everyone. A statement broad enough to cover every segment says nothing to any of them.
• Doing it once. Segments shift. Review STP when win rates, buying triggers or competitors change, and keep an eye on the market with a regular competitive intelligence routine.

Where ThriveFinity Fits

You can run a first STP pass yourself with sales notes, a list of recent wins and losses, and an afternoon. Where we help is when the targeting choice is expensive to get wrong.

• Decision Brief (£749 + applicable taxes, 48-hour target): one decision, such as which segment to lead with, tested against market, buyer, competitor and trend evidence, with a signed seven-block Decision Card and a 90-day plan. See the Decision Brief page for the full scope.
• Go-to-Market Build (£3,999 + applicable taxes): once the target is chosen, we rebuild the positioning, a 5-page site, a 20-slide sales deck and a 3-email sequence for that segment. The Go-to-Market Build page lists everything included.

We're not the right fit if you need months of hands-on marketing leadership, a brand identity, or ongoing campaign delivery. A fractional CMO or an agency suits those better. And if you haven't yet spoken to buyers in the segments you're weighing up, start there. For a structured way to gather the outside evidence, the free competitive intelligence audit checklist is a good companion.

Pranav Unni

Founder · ThriveFinity Connect on LinkedIn →

Pranav Unni is the founder and lead verifier of ThriveFinity. He reads and signs every paid deliverable personally, and writes about go-to-market decisions for established B2B companies.