How are string literals compiled in C?

How are string literals compiled in C? In my understanding, in test1 the string "hello" is placed in the data segment by the compiler, and in the second line p, the hard code of the virtual address is assigned. It's right? and that there is no fundamental difference between how test1 works and how test2 works.

Some codes:

#include <stdio.h>

test1();
test2();
test3();

main()
{
    test1();
    test2();
    //test3();
}

test1()
{
    char *p;
    p="hello";
}

test2()
{
    char *p="hello";
}

test3()
{
    char *p;
    strcpy(p,"hello");
}

any reference from the C standard would be greatly appreciated, so that I can understand this thing in depth from the point of view of the compiler.