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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?
Grades and Standards
• How did Grades and Standards affect your
food?
Fresh Fruit
Milk
Inspected
Eggs
Quality
Appearance
and Condition
Other Examples of How Companies
Use Grades and Standards
• Specific tire sizes to fit
our specific cars
• ALL children’s feverreducing medicine
contains:
• same ingredients
• same doses
(regardless of what brand it is)
Other Examples of How Companies
Use Grades and Standards
• Movies:
– Ratings
Rated: R
•Restaurants:
–Ratings
Andy’s
Rated: 97.5
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 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
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
• 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
• 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
1. Agricultural raw materials- like cotton
2. Food Products:
a. USDA- Meat
b. Dairy
c. Fresh Produce
d. 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
• Defined as promises
expressed in a specific
statement concerning the
quality of the product
– Can be written or oral
Implied Warranty
• 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
• 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
Limited Warranty
• Defined as warranties that
do not contain the
provisions of full warranties,
may cover only certain
repairs or specific parts
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