Marketing Strategy: High Cost & Low Cost Budgeting Plans for SMEs

This report provides a review of high and low cost budgeting plans tailored for Small and Medium Enterprises (SMEs), with a specific focus on marketing strategies. The introduction emphasizes the importance of marketing strategy in minimizing costs and formulating effective plans based on market conditions. The report outlines the requirements of a budgeting plan for SMEs, highlighting benefits such as efficient revenue and expense management, cash flow control, adaptability to market changes, and pricing strategy optimization. The strategy section suggests focusing on cost reduction, brand value enhancement, and sales structure optimization for SMEs launching new products. The core of the report details low-cost and high-cost budgeting plans, including assumptions about revenue, cost of goods sold, expenses, and the resulting impact on net profit. The low-cost plan considers a 10% increase in sales and associated costs, while the high-cost plan assumes a 30% increase in revenue and expenses. The report concludes by referencing several scholarly articles that support the concepts discussed. This assignment is designed to help students understand the practical application of budgeting plans in a marketing context for SMEs. The analysis of the report is crucial for making informed decisions about financial planning and resource allocation within the business.

R E V I E W O F H I G H C O S T A N D L O W C O S T
B U D G E T I N G P L A N
BUDGETING PLAN FOR
SME

INTRODUCTION
Marketing strategy is said to be one of the greatest tool for the
company who are aspiring to enter into a new business or trying to
enter in a new project or stepping foot in a new industry. The very
advantage of the marketing strategy is that it helps the company to
minimize the cost and also helps the company to formulate a strict plan
after taking the industry and market situation into consideration. This
will also help the management of the company to take the decision.

REQUIREMENT OF BUDGETING
PLAN FOR SME
The requirement of Budgeting Plan for SME includes some
benefits (Cacciolatti and Lee 2016). They are provided below:
 Helps to manage the revenue and expenses of company very
efficiently
 Helps the company to manage the cash flow of the company
 It helps the company to blend with the ever changing market
and industry in which the company is involved in.
 It also helps in the pricing strategy of the company.

STRATEGY PLAN
The best strategy for small and medium enterprise who wants to
launch the insulated vessel in the market are provided below:
• The company’s strategy should focus on the cost reduction of
the product which they want to introduce in the market.
• The strategy also put emphasis on the increase on the brand
value of the company by providing well established service.
• The strategy will also include the sales structure so that the
growth rate of the company remains in upward slope (Dong, Liu
and Lin 2014).

LOW COST BUDGETING PLAN

In the low cost budgeting plan 10% increase is taken into
consideration as it is observed that the revenue and sales has
also increased in this process (Alomar and Pasek 2014). As there
is a increase in sales it is also observed that the cost of goods sold
also increased by 10%. It is also assumed that the expenses has
also increased by 10%. It is also observed that the net profit also
increased considerably. After the formulation it is seen that the
company will gain the more net profit than its initial year.

HIGH COST BUDGETING PLAN

In the process of the formulation high cost budgeting plan it is
assumed that there will be a 30% increase in revenue and sales of
the company. It is also assumed that there will be a 30% increase
in the cost of goods sold in the company (Ganzarain and Errastin
2016). Hence the gross profit will also increase. It is also assumed
that there will be a 30% increase in th expenses which will be
incurred by the company while performing the business. After the
formulation it is seen that the company will steep rise in the net
profit of the company.

BIBLIOGRAPHY
Alomar, M. and Pasek, Z.J., 2014. Linking supply chain strategy
and processes to performance improvement. Procedia CIRP, 17,
pp.628-634.
Cacciolatti, L. and Lee, S.H., 2016. Revisiting the relationship
between marketing capabilities and firm performance: The
moderating role of market orientation, marketing strategy and
organisational power. Journal of Business Research, 69(12),
pp.5597-5610.
Dong, J., Liu, C. and Lin, Z., 2014. Charging infrastructure
planning for promoting battery electric vehicles: An activity-
based approach using multiday travel data. Transportation
Research Part C: Emerging Technologies, 38, pp.44-55.
Ganzarain, J. and Errasti, N., 2016. Three stage maturity model
in SME's toward industry 4.0. Journal of Industrial Engineering
and Management (JIEM), 9(5), pp.1119-1128.