Marketing Essentials Section 32.1 Warranties n Chapter 32 Extended Product Features Section 32.1 Warranties

Warranties SECTION 32.1 The different types of warranties What You'll Learn The different types of warranties The importance of warranties to product planning Additional extended product features The major provisions of product safety legislation Consumer responsibilities and rights related to product performance

SECTION 32.1 Warranties Why It's Important Warranties are used by sellers to encourage customers—whether a wholesaler, retailer, or consumer—to purchase a product or service. Depending on how warranties are used and the quality of the product or service, they can either boost sales or become a major problem for a business.

Warranties SECTION 32.1 warranty express warranty full warranty Key Terms warranty express warranty full warranty limited warranty implied warranty warranty of merchantability warranty of fitness for a particular purpose disclaimer

Warranties SECTION 32.1 Warranties A warranty is a promise or guarantee given to a customer that a product will meet certain standards. It is usually applied to materials, workmanship, and/or performance, and comes in two forms: express implied

Warranties SECTION 32.1 Express Warranties An express warranty is a warranty that is explicitly stated (written or spoken), to induce a customer to buy. There are two types: A full warranty covers repairs or replacement of a defective product at no cost. A limited warranty excludes certain parts of the product from coverage, or requires the customer to pay some portion of repairs.

Warranties SECTION 32.1 Implied Warranties An implied warranty exists automatically by state law whenever a purchase takes place. They are made by sellers. There are two types of implied warranties: warranty of merchantability warranty of fitness for a particular purpose Slide 1 of 2

Warranties SECTION 32.1 Implied Warranties A warranty of merchantability is a promise that the product is fit for its intended purpose. A warranty of fitness for a particular purpose arises when the seller advises a customer that a product is suitable for a particular use and the customer acts on that advice. Slide 2 of 2

Warranties SECTION 32.1 Warranty Disclaimer A disclaimer is a statement that contains exceptions to and exclusions from a warranty. Disclaimers are used to limit damages that can be recovered by a customer.

Warranties SECTION 32.1 Role of Warranties in Product Planning Customers may make their decisions to purchase based on the extended product feature. Warranties are significant to a business because they: force a company to focus on customer needs set clear standards of performance generate customer feedback encourage quality control boost promotional efforts

Warranties SECTION 32.1 Other Extended Product Features Additional features that help create customer satisfaction are: delivery installation billing service after the sale directions for use technical assistance training

Warranties SECTION 32.1 Consumer Laws and Agencies Manufacturers must be sure that their products meet all the requirements of the law. They must be safe, adequately labeled, and accurately advertised; if they are not, the manufacturer could face fines or product recalls.

Warranties SECTION 32.1 Federal Statutes Many warranties have their origins in the Magnuson-Moss Consumer Product Warranty Act of 1975, which governs written warranties for most consumer products. The act: sets minimum standards sets rules for making warranties available before sale sets provisions for lawsuits if warranties are not fulfilled Slide 1 of 3

Warranties SECTION 32.1 Federal Statutes The Consumer Product Safety Act of 1972, established the Consumer Product Safety Commission, which has the power to: require warning labels recall product or order repairs prohibit a product's sale Slide 2 of 3

Warranties SECTION 32.1 Federal Statutes The Food, Drug, and Cosmetic Act of 1938 was designed to assure that products will be pure, wholesome, effective, informatively labeled, and truthfully advertised. It is enforced by the Food and Drug Administration. Slide 3 of 3

Warranties SECTION 32.1 State Statutes Many states have passed their own consumer protection laws aimed at poorly made or poorly serviced products. Lemon laws are designed to protect consumers from poorly built cars. Licensing and certification laws require certain individuals—e.g., auto mechanics, realtors, and building contractors—to meet training requirements.

Warranties SECTION 32.1 Consumer Rights and Responsibilities Consumers have a right to expect quality products at fair prices. If not, consumers should : Contact the seller or the manufacturer. If the problem is still unresolved, contact the government agencies that assist with consumer complaints. If the problem is still not resolved, consumers can take legal action.

Reviewing Key Terms and Concepts ASSESSMENT 32.1 Reviewing Key Terms and Concepts 1. What are two types of warranties? 2. Why are warranties important for product planning? 3. Identify three additional extended product features that are frequently part of product planning. Slide 1 of 2

Reviewing Key Terms and Concepts ASSESSMENT 32.1 Reviewing Key Terms and Concepts 4. What are the basic provisions that product safety legislation requires of manufacturers? 5. What can consumers do when they do not feel that a product's warranty has protected them adequately? Slide 2 of 2

ASSESSMENT Thinking Critically 32.1 Many unsafe and potentially dangerous toys enter the country from other countries. What should the federal government do to prevent this from happening?

Graphic Organizer 32.1 Types of Warranties Express Implied Warranty Full Warranty Limited Warranty Warranty of Merchantability Warranty of Fitness for a Particular Purpose

Marketing Essentials End of Section 32.1