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POWER 50;FOOD COMPANIES SERVE INFLUENCE IN MANY WAYS;PACKAGE GOODS: IT'S PRICE AT POST BUT CREATIVE AT WRIGLEY, FRITO-LAY

By Published on .

Although Mark Leckie commands a hefty media budget-at least $165 million-it wasn't his spending clout that shook the food industry this year.

Indeed, the category is full of major marketers whose annual ad spending tops the $100 million mark.

But Mr. Leckie, 43, is president of Post cereals, the Philip Morris Cos. unit that fired the first shot in the cereal pricing wars.

STUNNING MOVE

On April 15, Post stunned the industry by announcing a price cut averaging about 20% for all its cereal brands.

The perennial third-runner in the $8 billion category, Post showed its moxie with the move. Mr. Leckie and Post stole headlines and boxed leader Kellogg Co. and No. 2 General Mills into a corner, forcing them to follow suit within weeks.

Not content with just that, Mr. Leckie and company also introduced a new coupon good on not just one Post cereal brand, but all of them.

COUPON CHANGES

"We decided to change the way we coupon," he says of the universal coupon. "In doing so we changed the way we compete, from promotions to a fair everyday price."

Between April and September, Mr. Leckie estimates the company dropped three coupons, a period when normally Post would have dropped about 10 a month.

"We are not promoting anywhere near what we used to promote," he says.

The result of the price-cutting has favored Post. Mr. Leckie says the company's share rose from a 15.2% volume share of the category prior to the rollback to 18.4% as of September.

The price slash, however, came at a price: Post's ad budget. The cereal marketer hasn't specified how much it trimmed advertising to pay for the cuts.

`MAINTAINING SUFFICIENT WEIGHT'

Mr. Leckie, however, isn't too concerned.

"Clearly we took some reductions but we are maintaining sufficient weight to get our message across," says Mr. Leckie. "The volume is going well enough to keep up a reasonable level of advertising, given the margin we took."

That said, he adds, "I'd love to have more."

POWER IN GUM

Another food that might not immediately come to mind as a power category is chewing gum. But consider this: Ron Cox, the man in the driver's seat at Wm. Wrigley Jr. Co., controls a $124 million media budget and stewards the brand name with the leading share in the country.

"You've got to remember we're not selling automobiles at $20,000 a pop," says Mr. Cox. "This is gum at 25 cents a pack. That's a lot of gum and we sell it a penny at a time."

Not only that, but Wrigley is an anomaly in an era where diversification is rife: Gum is its only business.

Mr. Cox, the 57-year-old group VP who heads marketing in the U.S. and Canada, maintains that gum is "an advertising-driven business. It's very sensitive to advertising and responds to good advertising. It's about the purest play left."

As the main liaison with Wrigley's agency BBDO, Chicago, Mr. Cox also works closely with creative approaches that have a winning appeal among adults.

HAVE FUN, LOWER STRESS

TV spots for Doublemint, for example, tout the brand as a way to have fun and lower stress in the workaday world. In the past, commericals have also cleverly touted chewing Wrigley's as an alternative to smoking.

Kids aren't, he says, gummakers' main targets.

"The highest level of consumption is among teens but there aren't enough of them," laughs Mr. Cox. "If we had 100% share of all teens, we'd still have under 20% of the market-and I'd be fired."

That, however, is unlikely. Mr. Cox, an 18-year veteran of the company, is in a high-level position considering that Wrigley, by his admission, spends "about 16 cents of every dollar in advertising."

Often, though, influence isn't only about how much money a marketing manager spends, but how he or she spends it.

"We don't have the $400 million McDonald's has to spend," says Roger Berdusco, VP-marketing at Frito-Lay. "We don't have even $100 million to spend."

HIGH-PROFILE CREATIVE

But the estimated $80 million annual ad budget he oversees is so creatively high-profile-supermodels for Baked Lay's and purportedly "landing" Rold Gold spokesman Jason Alexander at the Super Bowl-that the effects created make the budget seem bigger.

"We've changed our philosophy on what we fund [for advertising]," says Mr. Berdusco, 34. "It's got to be a great idea first-that's where the dollars will flow."

He says that while in the past the company would routinely put its budget behind lines that had no product news, that's now changed.

"We've got to get noticed," he says. "We don't have a ton of money so we have to find the most compelling ways" to get the brand message before consumers.

INSIGHT AND INNOVATION

This philosophy also extends to new products, where the company has scored this year with introductions such as Baked Lay's and Cheetos Checkers.

"Insight and innovation are the key," says Mr. Berdusco. And the acid test, he says, is "NBDB," a company acronym for "never been done before."

Such marketing fearlessness has been rewarded at Frito-Lay before, landing his former supervisor-and a member of last year's Advertising Age Power 50-in good stead. A similar "big idea" strategy led Brock Leach, Frito's former senior VP-marketing, to be promoted earlier this year to President-CEO of Frito-Lay/North America.

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