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In the mid-1980s, Budget Gourmet had a clear-cut niche that other frozen-food marketers envied: upscale entrees at lower prices in a clever package designed to go from freezer to oven to tabletop.

But after being acquired by Kraft in 1987, the up-and-coming brand fell victim to a series of miscalculations, aggressive price increases and uncontrollable market forces.

Kraft wanted to slap its own name arrogantly on a similar line of frozen entrees, diluting Budget Gourmet's position. Then, swept up in the race to compete with ConAgra's Healthy Choice, it experimented with both Budget Gourmet and a sister brand, Eating Right, as megabrands.

At one point, Budget Gourmet encompassed everything from an ill-conceived Hot Lunch line to pizza. What it lost in the process was its identity.

"We lost our focus on what Budget Gourmet stood for," says Larry Benjamin, president of Kraft General Foods' All American Gourmet Co. unit.

When Mr. Benjamin took his job in mid-1992, Budget Gourmet had hit an all-time share low-a number that became a rallying cry.

Under his leadership, All American Gourmet slashed its stockkeeping units in half, paring the Budget Gourmet line back to its original business of frozen entrees. Prices were cut about 15%, to get retail prices under $2. And the marketer hired a new agency, Young & Rubicam, New York, to produce hip TV commercials designed to win younger adult consumers. The musical theme: "Things that make you go mmmmmmmm."

Unit and dollar sales for Budget Gourmet and the Light & Healthy entrees were up more than 20% in the past year, according to Information Resources Inc. And those are numbers to make Mr. Benjamin "go mmmmmmmm," too.

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