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

2. 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

3. 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.

4. 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

5. 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

6. 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.

7. 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
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8. 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.
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9. 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.

10. 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

11. 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

12. 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.

13. 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
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14. 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
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15. 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.
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16. 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.

17. 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.

18. 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.
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19. 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?
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20. 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?

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

22. Marketing Essentials
End of Section 32.1