Wilson (1998) purpose that segmenting the market is a way to better allocate a company’s resources and satisfy their customers as well as sustain a competitive advantage. In the market there are increasing competition and globalization where industrial segmentation is considered to be a complex process. Earlier consumer- and industrial- companies have used similar demographic and socioeconomic variables when segmenting the market, but this has changed. Today more and more companies within the industrial market segment their customers after profitability and needs, which scholars emphasizes companies could benefit from.The purpose of the thesis is to develop a segmentation strategy for “Furniture Fitter” built on customer’s profitability and customer’s needs. To be able to carry out this study the method used was of both qualitative and quantitative art. Semi-structured face-to-face interviews and telephone interviews was conducted with “Furniture Fitter”, as well as a telephone and Email questionnaire with the company’s customers and sales force. The theoretical background consists of theories about segmentation and customer profitability, where the most important ones form the theoretical framework of this thesis.In the analysis it was evident that “Furniture Fitter” needs to look over their applied segmentation strategy, since it was shown that their resources were misallocated. The believed reason for that was that the applied segmentation strategy was built on only the variable customer’s potential. Through a simple profitability analysis it was revealed that a large share of “Furniture Fitter’s” customers was unprofitable and through the questionnaire sent out to the customers of “Furniture Fitter” it was shown that their needs had a high level of homogeneity.After applying the findings on the segmentation strategy, which consist of a profitability analysis model and a segmentation matrix, developed by the authors of this thesis, it was found that the profitability analysis model as well as the segmentation matrix needed to be modified to better suit “Furniture Fitter’s” business strategy. The modified segmentation strategy is instead of being built on customer’s profitability and needs built on their profitability and potential. If “Furniture Fitter” bases their segmenta...
