Capital Budgeting Analysis in Digital Marketing Activities at Yes Cake & BakeryJournal: International Journal of Business Management & Research (IJBMR) (Vol.8, No. 6)
Publication Date: 2019-12-31
Authors : Muhammad Atras Mafazi;
Page : 1-8
Keywords : Capital Budgeting; Investment Feasibility & Digital Marketing;
The purpose of this paper is to construct the budgeting plan and investment feasibility analysis to get complete picture of investment and feasibility in digital marketing in SME. A series of structured interviews and brainstorming with the chairman and staff of Yes Bakery to prepare financial aspect in digital marketing strategy in Yes Bakery was conducted. The analysis was done in capital budgeting method such NPV, IRR, DPP, and PI with three scenarios: Optimistic, Moderate, and Pessimistic. It has been found that the consumer's behavior in seeking for information, in order to buying product is shifting to digitalization. To support the decision in running digital marketing activities, after making projected income and cash flow, also conducted an investment analysis to determine the feasibility of investing in digital marketing activities. Both scenarios of optimism and moderate provide an assessment that digital marketing investment is feasible to run. This is seen from NPV, IRR, and PI, which qualify for investment feasibility. The discounted payback period of the two scenarios also illustrates that the investment will reach its turning point before the estimated payback period. The study was conducted in one Small Medium Enterprise (SME), and this paper is a direct application between the theories of capital budgeting with business practices, so that, it can become a reference of business owner before investing or developing new products.
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