Hershey's sweet plan

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It's a good thing when marketers act like marketers. And that is precisely what Hershey Foods Corp. CEO Rick Lenny is doing with his plan to focus advertising on key brands and apply savings from a corporate restructuring to marketing. Smart marketing often is about executing the basics. That's what Hershey is doing with a strategy applicable far beyond the chocolate business.

Hershey is doing nothing revolutionary. That's the point. While out-of-the-box thinking is welcome in marketing, there is another way to play: Do the obvious right thing, and reap the benefits.

In Hershey's case, one of the obvious things is to copy rival Mars' strategy of concentrating ad spending on the strongest brands. If your competitor is doing something smart in marketing, steal the idea (and try to improve on it).

Hershey will focus its budget on franchise brands, such as Reese's and Hershey's Kisses, rather than frittering away money on secondary lines. (We assume Mr. Lenny's plan is flexible enough that Hershey will be ready to invest heavily when it has a new brand or product with strong growth potential.)

Mr. Lenny's plan to harness restructuring savings is particularly ingenious. It is standard operating procedure to take savings from corporate restructurings straight to the bottom line; that's one way CEOs pay tribute to the prophets of Wall Street.

Mr. Lenny, fresh from marketing-savvy Nabisco, came up with a bolder solution at Hershey: Invest the annual savings from restructuring ($65 million) in marketing and sales, with advertising getting half the cash. That's a clever way to find more marketing money in this economy.

Hershey is going to invest in its brands. This is the way to build a business in a marketing-driven category. Rick Lenny is doing the right thing for investors, for Hershey and for the future.

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