Reference no: EM132992847

The McGuire Brothers Furniture Store has been in business for over 100 years. Angus McGuire, the first to immigrate to the United States, was trained as a cabinet maker in Scotland. He was coming to the end of his apprenticeship when the opportunity to sail to the U.S. appeared. Upon arrival, he worked as a day laborer in New York installing wood trim on new houses but soon learned of an opportunity to make furniture in Baltimore, Maryland.

After a few years, his brother Sean joined him and they opened the furniture store. Through the generations, they were happy to have any customers and did not really take inventory of which customers were the most profitable for the firm. However, as competition grew and consumers were less interested in solid wood furniture, primarily because of the rising cost, they decided that they needed to profile which customers were most profitable and how should they segment them.

Problem 1: What would you recommend as a proper method of segmenting the customers of the family business? What metrics would you use?