General Mills has helped set the overall marketing direction of the cereal category by cutting promotion spending and prices in 1994, before category leader Kellogg Co. and Kraft Foods' Post division followed suit.
That move didn't pay immediate dividends. But Jeff Rotsch, president of Big G cereals, says shares are up since mid-1995, with Big G gaining 1.2 share points and 10% in volume for the fiscal year ending May 31.
He credits positive effects of Big G's promotion, pricing and advertising strategies, plus successful launches of Frosted Cheerios, Honey Frosted Wheaties and Crispy Wheaties 'n Raisins.
Frosted Cheerios has become "the largest new product ever introduced into the cereal category," Mr. Rotsch says, breaking first-year volume records set in 1979 by Honey Nut Cheerios and grabbing 1% of the $7.9 billion category for the 52 weeks ended April 21, according to Information Resources Inc.
The brand is largely a restaging of Big G's Frosty-Os, discontinued in 1979, Mr. Rotsch says. The difference was positioning within the Cheerios megabrand-where adults are more comfortable with the sweetened cereal for themselves and their kids-plus strong integrated marketing, including ads by Saatchi & Saatchi Advertising, New York.
Mr. Rotsch, 45, says the Wheaties extensions benefited from a "top 10" image with retailers, which belies a modest 1% share for the core brand, and sports heritage with consumers, played up in ads by DDB Needham Worldwide, Chicago.
Recent successes don't mean all new Big G products will be brand extensions, he says, jokingly suggesting "Kiwi Cheerios." But he acknowledges having strong brands to extend is a big plus in a category where retail slotting can be tougher than getting a puck past a goalie.
Before facing off with Tony the Tiger and Cap'n Crunch, Mr. Rotsch played hockey for the University of Wisconsin. His 22-year career at General Mills included leave to play on the U.S. national team from 1973 to '75.