STP in Agri-Marketing: Segmenting, Targeting, and Positioning Explained

If you sell the same tea to a health-conscious urban consumer and a price-sensitive rural buyer using the same message, chances are neither will feel spoken to. That’s the core problem the STP model – Segmenting, Targeting, and Positioning – solves in agri-marketing. Whether you’re marketing Darjeeling tea, single-origin coffee, or organic spices, STP gives you a structured way to figure out who your best customers are, which group to focus on, and how to make your product stand out. Let’s break down each step with real examples from the world of tea and coffee.

What is the STP model? 🔗

STP stands for Segmentation, Targeting, and Positioning. It is a three-step marketing framework popularised by Philip Kotler that helps businesses move away from a one-size-fits-all approach. Instead of broadcasting the same message to an entire market, STP encourages you to divide the market into meaningful groups, choose the most attractive group to serve, and then craft a distinct identity for your product in that group’s mind.

In agricultural and plantation marketing, this is especially important. Agri-products like tea and coffee are consumed by vastly different types of people – from roadside chai drinkers to speciality café enthusiasts. A single promotional strategy simply cannot address all these consumers effectively. The STP framework ensures that marketing effort and budget create maximum impact by aligning your product with the needs of a well-defined consumer group.

Step 1: Market segmentation 🔗

Market segmentation is the process of dividing a broad market into smaller sub-groups of consumers who share similar characteristics. These sub-groups, or segments, are expected to respond similarly to specific marketing efforts. For agri and plantation products, segmentation allows producers and marketers to understand the incredible diversity of consumer preferences – and then design offers to match.

Bases of segmentation 🔗

There are four commonly used bases for segmenting any market:

Demographic segmentation divides the market by age, gender, income, education, and family status. For instance, younger consumers aged 20-35 may gravitate toward cold brew coffee or iced tea, while older consumers may prefer traditional hot beverages. Income level also matters – a premium Darjeeling first flush tea commands a very different buyer than a standard CTC blend.

Geographic segmentation divides consumers by location, region, or climate. In India, this is particularly relevant. Northern states like Delhi, Uttar Pradesh, and Punjab have a strong preference for spiced, milky chai. Southern states like Karnataka and Tamil Nadu have a deep-rooted filter coffee culture. Assam and West Bengal are known for their black tea traditions. These regional differences shape everything from flavour profiles to packaging.

Psychographic segmentation groups people by their values, lifestyles, and personality traits. A consumer who values sustainability and organic farming is a different segment from one who primarily cares about convenience. Health-conscious consumers who seek green tea or herbal infusions have different motivations than those looking for an indulgent, creamy latte experience.

Behavioural segmentation looks at buying habits, brand loyalty, usage rate, and the benefits consumers seek. Some tea drinkers consume five cups a day – they need affordable, accessible options. Others drink speciality tea once a week as a treat – they value quality and uniqueness over price.

Segmentation in the tea market 🔗

India is overwhelmingly a tea-drinking nation. According to research by Mintel, around 62% of Indian consumers drink regular hot tea, making it far more popular than coffee. But “tea drinkers” is not one homogeneous group. Geographically, preferences vary widely – masala chai dominates in the North, cutting chai is popular in Maharashtra, and Darjeeling teas have a devoted following among premium buyers both domestically and internationally.

Demographically, the youth segment increasingly experiments with green tea, matcha, and flavoured iced teas, while older households remain loyal to loose-leaf CTC blends. Psychographically, there’s a growing segment of wellness-oriented consumers who buy herbal and organic teas specifically for health benefits like antioxidants and stress relief.

Segmentation in the coffee market 🔗

Coffee consumption in India has been steadily rising. A study by the Coffee Board of India and CRISIL estimated domestic coffee consumption at 91,000 tonnes in 2023, up from 84,000 tonnes in 2012, driven mainly by instant coffee at home and growing café culture in cities. The market can be segmented geographically – South India accounts for the bulk of coffee consumption, while northern and western regions are newer, faster-growing markets. Behaviourally, consumers split into daily instant-coffee users, occasional café visitors who order lattes and cappuccinos, and a niche but growing group of speciality coffee enthusiasts who care about single-origin beans, roast profiles, and brewing methods.

Step 2: Market targeting 🔗

Once you’ve identified your market segments, the next question is: which one (or ones) should you focus your resources on? This is targeting – the process of evaluating each segment and selecting the most attractive ones to serve. Not every segment is worth pursuing. A good target segment should be large enough to be profitable, accessible through available marketing channels, aligned with the firm’s strengths, and distinct enough to respond to a tailored strategy.

Targeting strategies 🔗

There are three broad targeting approaches available to agri-marketers:

Undifferentiated (mass) targeting treats the entire market as one segment and uses a single marketing mix. This is common for basic commodity products – a bulk CTC tea producer selling through wholesale channels to millions of households doesn’t differentiate much by consumer type. The focus is on affordability, availability, and volume.

Differentiated (multi-segment) targeting involves pursuing multiple segments with tailored products and messages for each. A large tea company like Tata Consumer Products does exactly this – it offers premium Tata Tea Gold for quality-seeking households, affordable Tata Tea Agni for the mass market, and Tetley Green Tea for health-conscious consumers. Each product has its own positioning, pricing, and packaging, even though they all come from the same parent company.

Concentrated (niche) targeting focuses all resources on a single, well-defined segment. A speciality coffee brand like Blue Tokai, for instance, targets coffee enthusiasts who value single-origin, freshly roasted beans. It doesn’t try to compete with Nescafé on the instant coffee shelf. Instead, it doubles down on a smaller but highly engaged and premium-paying segment.

How to evaluate segments in agri-marketing 🔗

When choosing which segment to target, agri-businesses should evaluate several factors. Segment size and growth potential tells you if there’s enough demand to justify the investment. The health and wellness tea segment, for example, has been expanding rapidly as more consumers become health-aware. Competitive intensity matters too – entering a segment where established players already dominate can be costly. Alignment with capabilities is crucial; a small-scale organic tea estate is better positioned to target premium buyers than to compete on price in the mass market. And finally, profitability potential – some segments are willing to pay significantly more for perceived value. Organic and fair-trade coffees, for instance, often command prices 20-50% higher than conventional alternatives, according to research published on ResearchGate.

Step 3: Product positioning 🔗

Positioning is about defining how you want your target consumers to perceive your product compared to competitors. It’s the final and arguably most creative step of the STP framework. Good positioning answers a simple question: why should a consumer in your target segment choose your product over everything else available?

Types of positioning 🔗

There are several positioning approaches relevant to agri-products:

Premium positioning emphasises superior quality, unique origin, and artisanal production. Darjeeling tea, for instance, is often positioned as a luxury product, marketed with references to its specific terroir, hand-plucking methods, and limited seasonal flushes. Similarly, single-origin Indian coffees from estates in Coorg or Chikmagalur are positioned around unique flavour notes and small-batch roasting.

Health and wellness positioning focuses on the functional benefits of the product. Green tea and herbal teas are commonly positioned around antioxidants, weight management, and overall wellness. This positioning appeals directly to the psychographically defined health-conscious segment.

Value positioning promotes affordability and accessibility. Brands like Wagh Bakri or Brooke Bond Red Label position themselves as the everyday chai for Indian households – reliable quality at a price that works for daily consumption. The messaging here centres on tradition, family, and comfort rather than exclusivity.

Convenience positioning highlights ease of use. Instant coffee brands like ready-to-drink (RTD) coffee and tea products are positioned for busy, on-the-go consumers who want their beverage without any preparation effort. This segment has been growing rapidly, particularly among younger urban consumers.

Experiential positioning builds an emotional or sensory connection with the consumer. Café chains like Starbucks or Café Coffee Day position their offerings not just as coffee but as a social experience – a place to relax, work, or socialise. The product becomes secondary to the overall brand experience.

Positioning maps 🔗

A useful tool for visualising positioning is the positioning map (also called a perceptual map). This is a two-dimensional chart where you plot competing brands based on two key attributes – for example, price and quality, or convenience and premiumness. Plotting your product alongside competitors helps you identify gaps in the market.

For tea, you might create a map with “price” on one axis and “health orientation” on the other. Standard CTC blends would cluster in the low-price, low-health corner. Premium organic green teas would sit in the high-price, high-health zone. If you notice an empty space – say, affordable health teas – that could be a positioning opportunity worth exploring.

STP in action: tea and coffee examples 🔗

Tea example: targeting the premium segment 🔗

Consider a Darjeeling tea estate that wants to grow its domestic market. Using segmentation, it identifies three main consumer groups: mass-market daily tea drinkers, health-conscious millennials, and affluent tea connoisseurs. After evaluating these segments, it decides to target the connoisseur segment – smaller in size but willing to pay premium prices and highly engaged with product quality. The estate then positions its teas around origin, craftsmanship, and limited-edition seasonal flushes. Marketing materials emphasise the specific garden, altitude, and processing technique. Distribution focuses on speciality retail stores and direct-to-consumer online channels rather than supermarket shelves.

Coffee example: targeting the convenience segment 🔗

Now consider an Indian coffee brand looking to expand beyond South India. Through segmentation, it identifies urban young professionals in northern metros as a high-growth segment. These consumers are time-pressed, brand-aware, and willing to try new products. The brand targets this segment with instant coffee sachets and ready-to-drink cans. Its positioning emphasises convenience, modern lifestyle, and a trendy image. Distribution is through e-commerce platforms, convenience stores, and partnerships with food delivery apps. The messaging is distinctly different from what the same brand might use in its traditional South Indian markets.

Why STP matters for agri and plantation products 🔗

Agricultural products face unique marketing challenges. Production is seasonal. Quality varies with weather. Many products appear similar at first glance – one green tea looks much like another on a store shelf. STP helps overcome these challenges by forcing clarity about who you’re selling to and why they should care.

Without segmentation, a tea producer might waste money advertising to people who will never buy premium teas. Without clear targeting, a coffee startup might spread itself thin trying to serve every type of consumer. And without strong positioning, even a high-quality product can get lost in a crowded market.

As the STP framework emphasises, the real power emerges when all three components work together. Segmentation tells you who is out there. Targeting tells you who to focus on. Positioning tells you what to say. Together, they turn a generic agricultural product into a brand with a clear identity and a loyal customer base.

Challenges in applying STP to agri-marketing 🔗

Implementing STP is not without difficulties, especially in agriculture. Small producers often lack the data needed for rigorous segmentation. Seasonal production cycles can disrupt consistent positioning – you can’t position yourself as a year-round supplier if your harvest lasts three months. Market volatility means that a segment that was profitable last year may not be this year.

However, even basic segmentation can make a difference. A small organic coffee farmer who simply distinguishes between local café buyers and export-oriented buyers is already practising segmentation. A tea cooperative that packages the same tea differently for retail consumers and hotel chains is applying targeting. The key is to start where you are and refine over time.

What do you think? How would you segment and position a plantation product from your own region – say, a local variety of tea, coffee, or spice – to reach a completely new consumer group? And is premium positioning always the best strategy for agri-products, or are there situations where value positioning creates more impact?

References

1. https://en.wikipedia.org/wiki/Segmenting-targeting-positioning
2. https://growthforte.com/blog/segmentation-targeting-positioning-stp-model
3. https://www.geeksforgeeks.org/marketing/stp-segmentation-targeting-and-positioning/
4. https://www.mintel.com/insights/food-and-drink/how-coffee-can-compete-against-tea-in-india/
5. https://coffeeboard.gov.in/Publications/Coffee_Consumption_2023.pdf
6. https://www.researchgate.net/publication/389337694_Marketing_Strategies_for_Agricultural_Products
7. https://www.grandviewresearch.com/industry-analysis/ready-to-drink-tea-and-ready-to-drink-coffee-market
8. https://www.adjust.com/glossary/stp/