Game Changer

CHAPTER 12The Choice Game: Framing Options for Customers

With contributions from Martin van den Heuvel, Matthew Kropp, and Santiago Aviles

Inspired by a week‐long immersion in Milan in 1983, Howard Schultz presented the leadership team at Starbucks with plans to adapt the “romance” of the premium Italian coffee experience to the US market.^{1 ,2} The coffeehouse he envisioned would sell espresso beverages in addition to whole beans.

“Premium” also applied to the proposed prices. The new coffeehouse would charge 95 cents for a cup of coffee, nearly double the 50 cents that a coffee drinker paid at the average diner back then.^{3 ,4} A 14‐ounce bag of whole beans would cost around $7, more than double the prevailing average of $3.00.⁵

Starbucks agreed to pilot the concept at one Seattle store. Soon, that pilot store attracted 800 customers per day, over three times as many as Starbucks' best‐performing retail stores.⁶ More important to Schultz, however, was that the test store “became a gathering place, and its atmosphere was electric.”⁷

Starbucks' next move, however, caught Schultz by surprise. It decided against a rollout.

Undeterred, Schultz founded his own company, called Il Giornale, named after Milan's daily newspaper.⁸ In 1987, that new venture acquired the existing assets of Starbucks – including the rights to the name – and eventually grew into a global company with ...