Grades, Standards and Warranties Obj. 2.06 Grades, Standards and Warranties

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

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)

Movies: Ratings Restaurants: Ratings Rated: R

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 (size, color, quality) Products are rated against standards and assigned a grade

Examples of Grading USDA AA, A, B Exterior, Interior, Size Eggs USDA AA, A, B Exterior, Interior, Size Southern States flowers Columbian Flowers Length of stem Fancy, Standard, Short Grading Standards

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

Organizations develop standards to: Make sure products are reliable Make sure products are used correctly and safely**** Determine where certain products can be sold

Who develops grades and standards? Government Agencies: ex. food, medicines, fair advertising (USDA, CPSC) **if transporting products across state lines Professional Organizations: ex. AAA Rates Hotels Businesses Non-governmental*** grading = “voluntary”

Importance of grades and standards in a Global Market By using certain requirements, products are known safe to use internationally. The standard is known as IS0 9000

***Consumers do not have to Grades and Standards aid in the buying and selling process by speeding things up. ***Consumers do not have to inspect before buying.

What is a warranty? 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

What is a guarantee? 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

Types of warranties Express Warranty ***Promises expressed in a specific statement concerning the quality of the product Can be written or oral

Implied Warranty 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 EX: ***toaster, car audio system

Full Warranty Limited Warranty 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 Limited Warranty Do not contain the provisions of full warranties, may cover only certain repairs or specific parts

effective guarantee 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 Unconditional No conditions for the customer to meet Understandable Clear language and no difficulty understanding the promises

Purposes of warranties and guarantees Reassure prospective customers Protect the producer and seller*** Gain repeat customers Increase sales Use as promotional tool Competitive tool Image builder

You do: WRITE in your notebook Use the Internet to locate information about a recent case involving the Consumer Product Safety Commission (CPSC) or any other government regulatory agency. Record the following information: Name of the company Nature of the product safety issue Outcome of the case