Marketing professor diagnoses problems with Starbucks

Bill Bergman, a Robins School of Business adjunct marketing professor, told University of Richmond students Wednesday evening that Starbucks was a phenomenal case study in the world of marketing.

"It clearly just got too big," Bergman said. "They clearly lost what they were about."

Bergman, also the President and CEO of the Bergman Group, a communications company in Richmond, presented, "How Starbucks Killed Advertising and Then Killed Itself! Welcome to Advertising's Third Age."

In the 1980s and 1990s, Starbucks was the poster child of marketing, Bergman said. It had little to no advertising, represented a haven from outside worries and a place to meet friends, and appealed to every generation, Bergman said.

"They were not all about how to pound home the message," Bergman said. "They were all about the experience."

Starbucks was a humongous success, Bergman said, because it embodied trends going on in the world in the 1980s, continued with those trends and happened to be doing the right thing at the right time.

But Starbucks lost its way with mass expansion, he said. With the aid of technology, Bergman said the world had become more personalized. For example, when a person is listening to their iPod in the gym, they are able to pick the music they want to listen to, rather than having to listen to whatever is playing, he said. Bergman said Starbucks had not been able to keep up with that change.

"They're on the wrong side of the trend," he said. "They became a mass product. They became like Wal-Mart. What they built themselves on, what they captured, they lost."

Bergman also presented America's marketing history from 1875 to today. He said the marketing world was currently on a roller-coaster ride, where changes in the business were happening much more quickly than in the past. He told students they had to look for growth areas such as in online retail or the Internet in general.

Stephen Weber, an M.B.A. student at the Robins School, said Bergman had showed how the world of marketing was drastically changing.

"We have to move outside of our traditional thoughts," he said.

Sarah Levine, a Westhampton College senior and business administration major, went to the presentation for her consumer behavior class.

"I'm going to have to consider taking a different approach when getting a job," she said. Levine said she would have to search more carefully, instead of immediately going to the traditional marketing firms.

Bergman said there were eight Starbucks in a three-mile radius from his office in Glen Allen, Va.

"What is that defined as?" Bergman said. "Mass appeal at a time of personalization. They're going to drown in this wave that's now coming their way ... They lost that personalization at a time when things are becoming more personal."

He assured students that Starbucks was not a lost cause.

"There's China, there's India," Bergman said. "I mean talk about growth opportunities. They'll continue to grow there and cut back here. They'll do fine."

Contact reporter Laurie Guilmartin at laurie.guilmartin@richmond