A German manufacturer enters Vietnam. The product is excellent – better engineered, better tested, better than most of what's already on the shelf. A local distributor comes on board, orders start small, and everyone assumes the rest will follow: the distributor knows the market, the product will speak for itself, and demand will build on its own.
Six months later, nothing moved. The product isn't bad. It's invisible.
This is one of the most common blind spots we come back to on this show: manufacturers assume that finding a distributor is the same as finding a growth partner. But that's not always the truth. To dig into where that assumption breaks down – and what to do instead – I sat down with Jorge Martin Martinez, founder and Managing Director of Bull Management Consulting, who has spent years managing and expanding distribution networks for multinational companies at the group and regional levels. We talked about what distributors do well, where manufacturers overestimate them, and how to structure a partnership that doesn't quietly cost you your own market.
What manufacturers expect – and what distributors actually deliver
What's normally expected from manufacturers in a manufacturer-distributor collaboration?
Jorge: Distributors are typically strong at making the product available on the market. But when it comes to generating demand, their capabilities vary widely. Some are advanced and can help create demand but that takes real investment in both advertising and promotion (A&P) and market knowledge. Only a few distributors with the right team profile offer a full agency distribution model in which they take over sales and marketing. Most focus on logistics: getting the product listed and taking orders. Creating demand is what actually makes the difference in market success – and that's rarely part of the standard deal.
Corinna: Our projects, especially in Vietnam, have taught us that distributors expect manufacturers to invest in building a strong brand – not simply deliver the product and hope the distributor takes care of sales. Many distributors expect more support, especially in demand generation, market presence, and visibility.
“Only a few distributors can offer a full agency distribution model.”
Is the expectation that manufacturers build the brand usually addressed in the contract?
Corinna: In my experience, manufacturers usually come to us once they're already frustrated. Once they feel the distributor isn't doing much on brand building or promotion. The tricky part is that both sides quietly assume it's the other's job. It's not just about who should do what, but how it should be done.
Jorge: This happens constantly. Most distributors have a sales and logistics team whose job is to place products at points of sale. If they lack industry-specific marketing knowledge, the manufacturer's advertising budget is often poorly invested, leaving a lot of value on the table. Take healthcare as an example: building credibility with hospitals and doctors has to happen before pharmacies and e-commerce even matter, and that requires highly qualified people: doctors and pharmacists talking to their professional counterparts. That's a serious investment, very different from a distributor who only takes orders. This is why marketing and route-to-market planning need attention early – ideally before launch, not after the first disappointing quarter.
“If distributors lack branding and marketing knowledge, advertising funds may end up poorly invested, leaving a lot of value on the table.”
Building demand from day one
What can manufacturers do together with distributors from the start to secure demand generation?
Corinna: Before any marketing happens, both sides should work out product-market fit and the branding approach together. Many companies – especially German manufacturers – bring genuinely high-quality products to markets like Vietnam, but their relevance to the local market still has to be proven. That step is skipped constantly, or the positioning is copied and pasted straight from Europe and only adapted on the surface. It comes down to whether the manufacturer has a strong product management team, and whether local market expertise is actually taken seriously.
Jorge: True! And even when a product is objectively excellent, in markets like Vietnam or across Southeast Asia, affordability often matters more than incremental quality improvements. Consumers may recognize that a product is very good but aren't necessarily willing to pay extra for degrees of “perfection” they don't need. Pricing becomes a core product attribute, sometimes more decisive than quality itself.
This is the pattern we keep circling back to on Brands Gone Global: what works at home doesn't automatically travel. A product engineered for a market that rewards precision can meet a market that rewards value. And if nobody re-examines that assumption early, the mismatch shows up as “the distributor isn't performing,” when the real issue sits further upstream.
Setting up the partnership without losing control
What should manufacturers watch for when working with distributors to enter new markets?
Jorge: Distributors usually start with small test orders. However, they often ask for exclusivity for several years. If sales don't materialize, the manufacturer can end up stuck. In some cases, distributors even register the product or trademark under their own name. Early on, manufacturers often think there's little to lose in a market they're not yet present in. Later, if the distributor succeeds, regaining control of the trademark becomes extremely difficult. In the worst case, manufacturers lose ownership of their own brand.
Corinna: That's why a balanced go-to-market model matters so much. A distributor can absolutely be a supportive partner, but a manufacturer should never hand over full control.
“Manufacturers may find it very difficult to regain control in the market once exclusive distribution rights have been given away.”
How important is independent market research before appointing a distributor?
Corinna: Very important, and it's the step most often skipped to save cost, whether because local brand awareness is still low or because established market research firms charge steep prices. But this is an investment every company should make. Without proper research, decisions end up being based on opinions rather than data, and the results rarely hold up.
Jorge: Most distributors won't invest in a thorough market assessment themselves. At best, they'll check whether the product fits their existing channels and try it with minimal risk to themselves. Independent research gives manufacturers an objective read on market fit and real leverage when negotiating with potential partners.
“Decisions based on opinions instead of data from proper market research rarely work.”
Many manufacturers assume the distributor will handle everything, from research to marketing. Is that realistic?
Jorge: That's one of the biggest misconceptions: “I have a distributor, so the distributor will handle everything.” Distributors often test a product simply because it complements their existing portfolio. And if it doesn't work, they can walk away with very little lost. The risk sits entirely with the manufacturer. Without active involvement, manufacturers often find that nothing happens to their product in the market – even though, with the right preparation, it could have succeeded.
“Manufacturers can't simply hand over responsibility and expect the market to take care of itself.”
Training the people who actually sell
What should manufacturers be doing to protect their interests and succeed in a new market?
Corinna: I see it as an obligation of manufacturers to properly train their distributors. Companies get sloppy here: skipping product training or failing to ensure frontline staff in shops actually understand the brand and the product. That's difficult when a distributor manages a large indirect network, but every salesperson on the ground needs to know why the product is valuable, what sets it apart, and how it fits the brand story. Otherwise, the sales opportunity is simply missed.
Jorge: Agreed – and the lack of training has a direct, measurable impact on commercial effectiveness. Manufacturers understand their own products and selling proposition best. That knowledge has to be consistently transferred to distributors and their sales teams and kept current. In industries like FMCG, retail staff need regular training because they're the actual link in the selling chain. And each one has to be aligned for the market to work.
“Training for distributors and their staff has to be done properly – and continuously, not once.”
How does centralized vs. decentralized branding come into play here?
Corinna: Strong global brands tend to steer branding centrally to avoid inconsistency. Many mid-sized companies favor decentralization instead. There are good reasons for it, since local decisions can be faster and more market-relevant. The challenge is that building a consistent global understanding of the brand takes real, sustained effort. If a regional or local manager is strong in marketing, decentralization can work well. If not, the brand identity weakens. Distributors won't fill that gap, because branding and demand creation simply aren't their job.
Jorge: Right. Most distributors are focused on pushing the product into the market, not on building brand momentum. That responsibility has to stay with the manufacturer, because distributors aren't set up to carry it.
The takeaway
Distributors are genuinely valuable partners for logistics, market access, and local sales execution. What they are not is a substitute for manufacturer responsibility. Sustainable market entry requires the manufacturer to stay actively involved: independent market research before signing, a brand and pricing approach that's actually tested against local reality (not copy-pasted from the home market), continuous training for the people on the ground, and contract terms that protect long-term control of the brand itself.
Where has “we have a distributor, so it's handled” cost you or your organization more than expected? We'd like to hear it.
About this episode's guest
Jorge Martin Martinez is the founder and Managing Director of Bull Management Consulting. With many years in top management at multinational distribution companies, from group level to regional operations, he has built and expanded large-scale distribution networks and a wide network of business relationships across market entry strategy, business start-up, buy-side M&A, distributor search, and negotiation.