When the relative size of the fully informed switcher
segment is small, Firm 3 may prefer to ignore the switchers
completely and offer no discounts at all (P2). This result
represents an important distinction between our segmentedswitcher
model and other models of asymmetric loyalty.
When multiple switcher segments exist, loyal segment sizes
are not sufficient to describe the nature of competition
among the various firms. The relative sizes of the switcher
segments must also be considered because they affect the
SLRs (φi) among the firms. Thus, a small firm may discount
or price high to play its niche, depending on its relative
SLR.