Specialty catalogs are a promotion and distribution technique commonly employed by direct marketers. They describe, graphically and verbally, a limited range of products. Specialty catalogs are a good promotion/distribution choice for new products. They are also most effective when using a niche strategy. There are several reasons for this:
- It is less risky than a mass distribution strategy. If it is not successful, it can be altered with only moderate expense.
- It is a stealthy way of testing market acceptance of the product. It doesn't alert the competition, or at least the competition will not perceive it as a threat.
- Specialty distribution is better able to obtain high margins than mass distribution. This will allow a price skimming strategy, where it is possible to capture the consumer surplus over time.
- Specialty catalogs allow the marketer to better target prime segments, like the early adopters and innovators that will be prepared to try a new product.
- Catalog response is immediate. Product problems will become evident before too many products are shipped.
- Catalogs are less expensive than sales forces. The average cost per sale is lower than most forms of advertising where low volumes are involved.
- The printed medium is suitable for new products or any other situation where detailed information needs to be communicated.