The main reason that niche markets are often highly profitable for incumbents is because their customers tend to be insensitive to prices.

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Niche markets are often highly profitable for incumbents not because their customers are insensitive to prices, but because these markets have less competition and the products or services can be tailored very specifically to the needs and preferences of a targeted customer group, allowing for potentially higher margins.

The Main Reason That Niche Markets Are Often Highly Profitable