Grades, Standards and Warranties Obj. 2.05 Grades, Standards and Warranties

Grades and Standards Why learn about Standards and Grades? How do Standards and Grades affect YOU?

Grades and Standards What did you eat for Breakfast or Lunch?

Appearance and Condition Grades and Standards How did Grades and Standards affect your food? Fresh Fruit Milk Inspected Eggs Appearance and Condition Quality

Other Examples of How Companies Use Grades and Standards Specific tire sizes to fit our specific cars ALL children’s fever-reducing medicine contains: same ingredients same doses (regardless of what brand it is)

Other Examples of How Companies Use Grades and Standards Restaurants: Ratings Movies: Ratings Andy’s Rated: 97.5 Rated: R

What Are Grades and Standards? Grades: Ratings assigned to products that tell to what extent standards were met Standards: Specifications that are used as a basis for comparing or judging goods or services

Grades and Standards What do you have to do to earn a good grade? What are some standards being used in your classes? What do you have to do to earn a good grade? A = Excellent!

Grades and Standards These requirements now become your standards that the teacher uses as her evaluation tool Your work compared to standards = GRADE

Grades and Standards How do Businesses use Grades and Standards? Standards are set Products are rated against standards and assigned a grade

Grades and Standards What do businesses do with products that fail to meet lowest standards? Products are disposed of or revamped

Grades and Standards Why do we use grades and standards? To make sure products are reliable How to use a product correctly and safely Where certain products can be sold

Sell at Outlet or Old Navy Grades and Standards Do you think the GAP will offer low standard clothes at their store? NO! What would the GAP do with these clothes? Sell at Outlet or Old Navy

Grades and Standards Speeds things up! How do Grades and Standards aid in the buying and selling process? Speeds things up! Consumers do not have to inspect. We know what products rank higher than others.

Grades and Standards standards important in a Global Market? How are grades and standards important in a Global Market? By using certain requirements, products are known safe to use internationally. The standard is known as 1S0 9000

Grades and Standards What groups develop grades and standards? Government Agencies: ex. food, medicines, fair advertising Professional Organizations: ex. AAA Rates Hotels Businesses

Grades and Standards What are 4 types of standards that businesses use? 1. Quantity - ex. how much will be produced in 1 day 2. Quality -ex. no returns or defective products 3. Time -ex. how many products can be made per hour 4. Cost -ex. how much do the products cost to make

Grades and Standards Examples of Graded Products Agricultural raw materials- like cotton Food Products: USDA- Meat Dairy Fresh Produce Fish 3. Oil- Graded according to its thickness 4. Fuel- Graded according to its octane rating 5. Coal- Graded according to its carbon and sulfur content 6. Lumber- Hardwoods are graded according to size, quality, and type of wood

What is a warranty? Warranty is a defined promise made by the seller to the consumer that the seller will repair or replace a product that does not perform as expected

Types of warranties Express Warranty Implied Warranty Defined as promises expressed in a specific statement concerning the quality of the product Can be written or oral Defined as an unwritten, unstated warranty understood by the consumer and the seller that a product will perform as expected The product will do what it is designed and recommended to do

Types of warranties Full Warranty Limited Warranty Defined as warranties that do not contain the provisions of full warranties, may cover only certain repairs or specific parts Defined as warranties that cover the entire product If the product doesn’t work it must be made good in a reasonable time if not the customer can choose a replacement or refund No time limits on implied warranties The customer need only notify the warrantor in order to obtain repairs

What is a guarantee? Defined as a promise made by the seller to the consumer that the seller will refund the consumer’s purchase price if the product doesn’t perform as expected. AKA – “Money-back guarantees” While warranties usually apply to goods, guarantees are given for both goods and services

Characteristics of an effective guarantee Unconditional No conditions for the customer to meet Understandable Clear language and no difficulty understanding the promises Easy for the customer to implement Not a lot of forms, people to see , and different locations Easy for the customer to collect When possible money should be refunded on the spot

Purposes of warranties and guarantees To reassure prospective customers To protect the producer and seller To gain repeat customers To increase sales To use as a promotional tool To use as a competitive tool To use as a image builder

Activity Use the Internet to locate information about a recent case involving the Consumer Product Safety Commission (CPSC). Record the following information: Name of the company Nature of the product safety issue Outcome of the case You will present your findings to the class