What NZ Manufacturers Typically Underestimate When Going Global

ManufacturingMarket ExpansionIndustrial Marketing
Written By Michelle Haynes

The biggest barrier to international growth isn't product quality - it's commercial capability.

Working with manufacturing clients on international expansion, I keep coming back to the same patterns. I went looking for data to either confirm or challenge what I'm seeing - digging into NZTE, Productivity Commission, and academic research on what holds New Zealand manufacturers back when they push into international markets.

The findings confirm what I've observed over two decades working inside and alongside manufacturing businesses. The main export bottlenecks aren't technical - our products are typically world class. The bottlenecks are commercial - building the visibility, credibility, and channels to reach buyers in markets where domestic reputation doesn't automatically carry over.

While the research I'm drawing on focuses on New Zealand, the same patterns show up with manufacturers in other markets. The specific challenges may vary - market entry into Europe or North America looks different from expansion into Australia - but the underlying pattern is consistent: technical capability outpacing commercial foundations.

The top challenges aren't about product

NZTE's text analysis of approximately 700 growth firms identified five major challenges for manufacturers pursuing international growth:

  1. Building brand awareness

  2. Finding the right partners and channels

  3. Strong overseas competition

  4. Understanding how destination markets differ from New Zealand

  5. Determining the right export pricing strategy

Notice what's NOT included in the list: product quality, technical capability, engineering excellence.

What IS on the list? Five challenges that all sit within the marketing function - brand, channels, competitive positioning, market understanding, and pricing. The research is essentially saying the top export barriers are all marketing capability gaps, not technical ones.

This won't surprise anyone who's worked inside an engineering-led manufacturer. There's often a genuine belief that technical excellence should be enough. That if the product is good enough, the market will find it. I've sat in those leadership meetings. The conviction is real, and it comes from a place of pride in genuine capability.

But competitive markets don't work that way. The challenge isn't building something worth buying. It's building the commercial foundations to sell it effectively in markets where nobody knows who you are.

Domestically, relationships and reputation can compensate for a while. Internationally, there's nothing to fall back on.

For New Zealand manufacturers specifically, brand awareness and partners/channels were the top two challenges - ahead of competition, market understanding, or pricing.1

This article focuses primarily on those two because they're foundational: without visibility and credibility, and without effective routes to market, the other challenges don't get a chance to matter.

What brand awareness actually requires

Brand awareness tops the list of challenges for a reason. For international buyers evaluating a supplier they've never heard of, unknown means unquantifiable risk. A known competitor with a slightly inferior product is often the safer choice - the buyer can assess what they're getting. Unknown is harder to justify to a procurement committee or a boss.

Academic research on NZ manufacturing SMEs confirms that companies expanding internationally build credibility through reputation in narrow technical niches and through reference customers, not mass-market brand campaigns.2

This is the right approach for B2B industrial. It's also a core part of the marketing function - marketing is more than ad campaigns, websites, or email newsletters. Marketing builds the fundamental foundations of your visibility and credibility in the markets you want to win.

The difference is effort. In New Zealand, reputation travels through relationships. The market is small enough that word of mouth and personal networks do a lot of the work - your track record spreads organically.

Internationally, those networks don't exist. You have to deliberately build visibility and evidence from scratch: documented case studies, referenceable customers willing to take calls, proof of performance in terms buyers care about, presence where buyers actually look.

NZTE's work with growth firms highlights that exporters consistently underestimate how much deliberate work this takes.1

The method is the same - reputation and references. But internationally, you're building from scratch in a market you're still learning.

Channel mistakes that limit growth

"Finding the right partners and channels" is the second biggest challenge for manufacturers after brand awareness. The mistakes are predictable, and, unfortunately, I've seen most of them happen.23

But they're not random errors. They're symptoms of the same underlying problem: treating channel as a sales problem (find someone to sell our products until we can), rather than as a commercial capability (build a system that reaches and serves customers in that market).

That mindset shows up as:

  • Opportunistic partner selection - moving forward with an overseas distributor before properly assessing their technical capability, installed customer base, or alignment with your positioning. It's rarely carelessness - more often it's pressure to show progress, limited options, or the relief of finally finding someone interested in representing you.

  • Overreliance on a single "hero" distributor - creating single-point-of-failure risk in critical markets. When that relationship sours or the distributor's priorities shift, years of market development can evaporate overnight.

  • The enablement gap - expecting partners to sell effectively with minimal training, marketing support, co-funded demand generation, or structured joint business planning. Manufacturers wonder why distributors aren't prioritising their products, but they've given them nothing to work with beyond a product spec sheet and good intentions.

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  • Weak or absent performance management - no targets, unclear territory definitions, no mechanisms to exit underperformers. The relationship drifts along producing mediocre results because nobody wants to have the difficult conversation.

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  • Misaligned margin structures - failing to build sufficient distributor margin into export pricing, so partners deprioritise your product in favour of lines with better economics. This one is particularly frustrating because it's entirely self-inflicted.

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Successful NZ industrial exporters treat channel building as a core commercial capability - which, like brand awareness, sits within the marketing function. They invest in partner selection, provide technical and marketing resources, revisit channel architecture as they scale, and treat partners as long-term collaborators rather than pure resellers.4

The missing commercial capability

Brand awareness and channel problems don't fix themselves. They persist because of what's missing inside the business - the commercial capability to address them.

Research on NZ manufacturing SMEs and high-performing exporters points to consistent gaps, and they map directly to what I see in practice.52

Most commonly, there's no dedicated export or international sales management. The CEO or engineers handle key accounts ad-hoc, fitting it around everything else they're already doing.

Strategic marketing is limited or absent - no clear value proposition by segment, no systematic lead generation, weak digital presence. Many SMEs are doing genuinely impressive work that nobody outside their immediate network has ever heard of. NZTE describes it as "a real digital disconnect."1

Often there's no commercial or revenue leader at all - nobody who integrates pricing, channel strategy, and key account management across markets. Without that, coordination tends to fall to the CEO by default, which works until it doesn't.

The Productivity Commission's research points to why: high fixed costs of international expansion, lack of scale to invest in both innovation and exporting, and critically, a shortage of leadership with international commercial experience.5

The reasons are understandable. The question is what to do about it.

What actually helps

From my experience - both inside manufacturing businesses and now advising them - it starts with an honest look at how commercial investment compares to technical investment. If a company has spent years and significant capital on product development but is planning to crack international markets with a part-time sales effort and no marketing budget, the maths doesn't work.

It means getting clear on what "credible supplier" actually looks like in target markets. Not assumptions - actual conversations with potential customers and partners about what they need to see before they'd shortlist a manufacturer. What proof points matter. What risks they're trying to mitigate. The answers shape where to build evidence, and they often surprise people.

And it means looking honestly at whether there's anyone (or any structure) coordinating commercial outcomes across the business, or whether it falls to the CEO by default. That works for a while. It doesn't scale.

None of this requires massive headcount. Fractional leadership, focused capability building, the right external partnerships - there are ways to build commercial foundations without a full executive team. But it does require treating commercial capability as a strategic priority, not an afterthought to product development.

I work with New Zealand manufacturers navigating exactly these commercial capability questions - particularly companies with strong technical foundations looking to scale domestically or internationally. If this resonates, I'd welcome a conversation.

I also send a fortnightly update with commercial insights for manufacturing leaders – sign up here if that's useful.

Sources

Note: The core capability-gap research (brand awareness, partners/channels, commercial leadership patterns) draws primarily on 2015-2021 data. The 2025 ExportNZ DHL Export Barometer confirms these patterns persist, with manufacturers still prioritising logistics, costs, and labour challenges while the deeper question of commercial capability remains underexplored.

Michelle Haynes
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Strategic Product & Marketing Leadership in Industrial B2B: A Comprehensive Framework