III. Now read the text and check your answers to the statements from ex. II.

Over time, different types of retailers have emerged and prospered because they have attracted and maintained a significant customer base. A retail institution is a group of retailers that provide a similar retail mix designed to satisfy the needs of a specific segment of customers.

The most basic characteristic of a retailer is its retail mix, which includes decisions and strategies regarding the type of merchandise sold, the price of the merchandise, the assortment of the merchandise, and the level of customer service.

The traditional general-merchandise retail stores are specialty stores, department stores, and discount stores. Since about 1970, a number of new types of general merchandise retailers have emerged and are becoming increasingly important to consumers. These include category specialists, home-improvement centers, off-price retailers, catalogue showrooms, warehouse clubs, and hypermarkets. A traditional specialty store focuses on a limited number of complementary merchandise categories and provides a high level of service in an area typically smaller than 8,000 square feet.

Department stores are retailers that carry a broad variety and deep assortment, offer considerable customer service, and are organized into separate departments for displaying merchandise. A home-improvement center is a category specialist that combines the traditional hardware store and lumberyard. It focuses on providing material and information that enable do-it-your-selves to maintain and improve their homes. A warehouse club is a general merchandise retailer that offers a limited merchandise assortment with little service at low prices to ultimate consumers and small businesses; stores are large and located in low-rent districts, and the goods usually include food and general merchandise. Off-price retailers offer an inconsistent assortment of brand-name, fashion-oriented soft goods at low prices, in exchange for not utilizing the manufacturer's promotional allowances, return privileges, and delayed-payment options.

A catalogue showroom is a retailer whose showroom is adjacent to its warehouse. These retailers typically specialize in hard goods such as housewares, jewelry, sporting goods, garden equipment, and consumer electronics. Catalogue showrooms can offer low prices because they minimize the cost of displaying merchandise, provide minimal service, and are located in lower-rent areas rather than regional malls.

A retail chain is a company operating multiple retail units under common ownership and usually having some centralization of decision making in defining and implementing its strategy. Some retail chains are divisions of larger corporations or holding companies.

Franchising is a contractual agreement between a franchiser and a franchisee that allows the franchisee to operate a retail outlet using a name and format developed and supported by the franchiser. Approximately one-third of all U.S. retail sales are made by franchisees. Some of the most well known franchises in America are McDonald's, Subway, and Dunkin Donuts.

The mail-order retailing of the late 1800s has developed into two types of nonstore retailing: general-merchandise and specialty catalogue retailers and direct-mail retailers. General-merchandise catalogue retailers offer a broader variety of merchandise in catalogues that are periodically mailed to their customers, while specialty catalogue retailers focus on specific categories of merchandise. Direct-mail retailers typically mail brochures and pamphlets to sell a specific product or service to customers at one point in time. Direct-mail and catalogue retailing are attractive business opportunities because a business can be started with minimal inventory and can use existing mailing lists to tailor its mailings to a targeted market.

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