Why does a general Milkman earn less than a Senior Engineer or any person in senior Management position of a Company?
Even though he supplies one of the most important nourishments to humans.
The same Milkman, if he were working not as a freelance Milkman, but working for a corporation by delivering milk to customers, he would probably earn more. Simply because, the company would make it very possible through its proper organization and delivery to serve more customers in less time in the objective of making more profit, and thus ending up with the Milkman earning more as well.
If the same Milkman worked as an Operations officer, regarding the supervision of Milkman INC's (the hypothetical Milk delivery Organization) delivering milk under his area, he would earn even more. Because, now he is more significant in determining the service and delivery to even more number of customers and thus, more profit to the corporation.
If he were the CEO of the Company of Milkman INC, he would earn even more going by the same logic.
But then there is a limitation to the numbers (the number of customers). Because finally at the end of the day, there is a market ceiling, say X%.
So, how can our hypothetical Milkman earn even more?
Well, only if he can charge more per liter. The way to charging more per liter is by making consumers feeling comfortable and requiring to pay more. The ways are numerous, but they all are noteworthy and equally important.
The quality of the milk (or food) is of concern. This can be achieved through better processes, better R&D, a visible consistency in its quality can be achieved, and if consumers are made aware through marketing (which is important). Customers will be willing to pay more for the milk they buy every day.
The service, and punctuality is of concern. People want things on time. It is admirable when things happen on time, as per schedule. So, customers will pay more for such a service.
Brand sensitization is another aspect where people get almost glued to a particular food brand, which at least feels all encompassing of all the good qualities a high quality food producer should hold. Marketing plays an important role here. Brand loyalty through better outlook of the brand logo, the tagline, the outfits of the delivery milkman, the van design and colors all add up to define the whole, also including the quality and service of the company breeds a belief system in what is offered. This makes the consumer want the product (in this case, Milk) from a particular brand even if it is marked at the same price, and in some cases maybe even at a marginally higher price in comparison to any other brand.
Thus, we see that the Milkman can earn more only when, he can serve more (i.e. Quantity, very important), and even more, if he can serve better (i.e. Quality- Customers have to be made to perceive to feel they will be or are served better. Perceiving is important, because if served properly, but not perceived appropriately, the customer does not buy for more or even any of it).
The necessary qualifications to achieve Quality and Quantity is scale (Operations), Human Resource, Finance, Marketing and above all Strategic planning, which unfortunately the Milkman we know very well does not possess generally. So even though, he may serve the nourishing white liquid, he unfortunately does not have the capacity to touch the lives of many and thus he earns lesser than a Senior Engineer or a Management executive.
The important lesson from the example of the Milkman is that, the more lives one can touch the better off one can get. The greatest example of this is "Amul" ('The Taste of India'), which is run as a cooperative. With its proper governance it achieves what would otherwise would not have been possible; thus, making all stakeholders being better off, including the Milkwoman in this case.
