Marketing Essentials

Chapter 32: Extended Product Features

Chapter Summaries

Section 32.1

• Warranties have two forms: express and implied. Full and limited warranties are examples of express warranties. Warranties of merchantability and warranties of fitness are the two kinds of implied warranty.
• Warranties are an important element of product planning because they help to increase sales and profits. Customers often base their purchasing decisions on the availability of warranties.
• The United States government has passed several laws to protect consumers. The Consumer Product Safety Act and the Food, Drug, and Cosmetic Act were both designed to ensure product safety.
• If a product does not perform as promised, a consumer has a right to legal action, if necessary. Consumers also have a responsibility to inform themselves about the proper use of products they buy.

Section 32.2

• Credit allows businesses or individuals to obtain products or money in exchange for a promise to pay later. The use of credit is essential to our economy.
• Banks, department stores, gasoline companies, and travel and entertainment companies all offer credit to consumers.
• Credit accounts include credit cards, charge cards, rebate cards, debit cards, and loans.
• Businesses can use trade credit to purchase things like materials, equipment, and inventory. They use credit memorandums, letters of credit, and credit drafts instead of credit cards.