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

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

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

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

5. 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)

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

7. 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

8. 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!

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

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

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

12. 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

13. 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

14. 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.

15. 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

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

17. 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

18. 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

19. 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

20. 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

21. 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

22. 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

23. 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

24. 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

25. 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