Haleon unveils brand-driven growth strategy ahead of GSK split

GSK Consumer Healthcare, due to rebrand as Haleon, has promised to continue driving brand investment ahead of sales growth when it demerges from pharmaceuticals business GlaxoSmithKline (GSK) later this year.

This will support the business’s new growth strategy, unveiled during its Capital Markets Day presentation today (28 February). The strategy comprises four key elements, encompassing innovation, ecommerce and brand investment.

The first element is to drive penetration growth across the business’s portfolio of health brands, including Sensodyne, Voltarol and Panadol, through brand innovation and reaching new consumers.

The second is to capitalise on new and emerging growth opportunities across channels, geographies and portfolios. This includes growing Haleon’s ecommerce sales, expanding the use of its existing brands through innovation and rollouts in new markets, and a “strong” focus on increasingly popular consumer trends, such as natural healthcare.

The business has 30 ‘naturals’ projects currently in the pipeline, while ecommerce accounted for 8% of Haleon’s sales in 2021.

The strategy’s third element is “strong execution and financial discipline” to provide a “strong platform for excellent marketing and commercial execution”. This includes “disciplined” cost control and re-investment in both brand innovation and advertising and promotional (A&P) activity.

We invest well behind our brands and disproportionately behind our power brands, because we see a strong return on investment.

Tamara Rogers, GSK Consumer Healthcare

The fourth element of the strategy outlines Haleon’s approach towards its environmental and social responsibilities as a business.

Haleon is targeting annual organic sales growth of 4-6% in 2022, alongside “sustainable moderate expansion” of its adjusted operating margin. The business achieved £9.5bn in sales during 2021, and an operating profit of £2.2bn.

Speaking at the event, CMO Tamara Rogers said the business’s brand building capabilities have “significantly strengthened” over the last three years,  highlighting in particular the business’s digital advancements.

Last year, Rogers oversaw the launch of a new purpose-driven brand strategy, ‘Brands with Humanity’, as the business looks to bridge the gap between selling products and solving problems by using what it has described as a more compassionate, data-driven approach.

Haleon now spends more than 45% of its media spend on digital, which Rogers said was a reflection of its audience’s media consumption habits and the business’s growing digital capabilities to engage with consumers “where they are”.

The business claims to have been the first consumer health company to bring a Google tech stack in-house, creating direct ownership of audience data to be used in conjunction with PeopleCloud, an end-to-end cloud-based audience platform operated by media agency Publicis Media.

“This allows us to better identify and connect with growth audiences and have full transparency on performance,” Rogers explained.

“This wealth of data, including the patterns we see in search, enables us to create relevant and targeted content and then optimise it dynamically.”

According to Rogers, in the 16 markets in which Haleon uses PeopleCloud globally, return-on-investment (ROI) was 40% higher on digital channels and over 125% better compared to traditional channels.‘Innovation, science, humanity’: Why GSK picked Haleon for its consumer healthcare rebrand

Rogers also highlighted Haleon’s “important” partnership with Google and analytics platform Picasso Labs, which has resulted in an industry-first AI tool that scans assets to measure creative effectiveness, enabling Haleon’s marketing team to optimise communications before they go live. This has led to a 34% uplift in ad recall and up to 22% gains in purchase intent, she said.

Finally, Rogers pointed to Haleon’s proprietary tool Trigger, which pulls in data signals to help marketing efficiency. For example, the technology tracks weather and search data to signal when the business should buy media for its seasonal product categories, so media spend is only invested when colds, flu rates or allergies are rising.

“All of this means we connect with the right person at the right moment with the right message and creative,” she explained.

Rogers added that Haleon will invest “well” behind its brands, and disproportionately so behind its “power brands”, because the business sees a “strong” ROI from doing so.

“Our bar is set high in terms of the type of marketing we want to do. We compete and frequently win at globally recognised industry awards,” she said.

Return on humanity

According to Rogers, Haleon has also seen ROI improve as a result of its push to be more “human”. As part of its new strategy, the business has acknowledged that “consumer needs go beyond the physiological”, with a pain relief product also alleviating emotional, financial and social tolls, for example.

“We understand that our brands are making a difference beyond just treating the categories we’re in,” she says.

According to the Forrester brand humanity index, people were 1.6 times more likely to buy brands that seem to be acting like people, engaging in persuasive and human ways. Rogers said this is “critical” in a world in which consumers are in control of curating what they experience.GSK unveils purpose-driven strategy as it moves away from functional messaging

“The logic of product claims, such as 10 times faster pain relief, only gets you so far. To drive real behaviour change, you’ve got to go deep and understand the person behind the condition – not just their painful knee, but deep into how they live their lives,” she explained.

“Very simply, the more people feel, the more people are inclined to take action.”

Last year, the company launched a new ad campaign for pain relief brand Voltarol, in which a grandpa uses its 12-hour Joint Pain Relief Gel to reduce pain in his knee, thus allowing him to get back into his love of motorcycling.

Commenting on the ad, Rogers said despite having no functional product demo as the brand might have used in the past, it ranked as one of the business’s most persuasive ads, and has delivered a “significant” increase in ROI compared to its previous approach.

Growing the innovation pipeline

Meanwhile, Haleon is looking to unlock new growth in its brands by moving them “beyond treatment”.

As one example, decongestant Otrivin has moved its focus from seasonal treatment to finding a “relevant role every day, all year round”. The brand has now completed a suite of nasal care products, both medicated and non-medicated, for adults and children, which supports daily maintenance of nasal health.

While the product extension is only just getting underway, it has already achieved up to 30% share of segments in some of the markets in which it has launched.

Franck Riot, head of global R&D at Haleon, said the business has a “robust pipeline” of innovations in the works, including both fast-to-market innovations responding to near-term trends, as well as innovations which require investment in clinical studies.

“Our pipeline provides resource for growth in the short, medium, and long term,” Riot said.

“The majority of these resources are focused on growing our core portfolio. It is mainly about strengthening the quality of the experience of our products, or creating even more personalised propositions at scale.”GSK’s Jerry Daykin on the 6Ps of digital transformation

GSK Consumer Healthcare announced its plans to rebrand to Haleon last week. The process of demerging from GSK and establishing itself as a new company is expected to be completed by mid-2022.

The new name, pronounced ‘hay-lee-on,’ has been created by merging the words ‘hale’ meaning in good health and ‘leon’, which is associated with strength. According to GSK, the new brand identity was created with input from employees, healthcare practitioners and consumers. It will be deployed in more than 100 markets globally.

The future for the company remains unclear, however. In January it was revealed GSK had rejected a £50bn bid from Unilever, despite the FMCG giant claiming a potential acquisition would be a “strong strategic fit”, combining its “consumer and branding expertise” with GSK’s technical capabilities.

Earlier this month the company confirmed Tamara Rogers will retain her role as CMO of Haleon after the demerger.

Last year, oral health was the biggest consumer healthcare division, notching up sales of £2.7bn in 2021.

Sales of pain relief products reached £2.3bn over the period, with sales of vitamins, minerals and supplements reaching £1.5bn and respiratory health sales falling to £1.1bn. Sales of GSK’s digestive health and ‘other brands’ were £1.8bn.