In deciding to use a particular incentive, marketers must first determine its size. A certain minimum
is necessary if the promotion is to succeed. Second, the marketing manager must establish
conditions for participation. Incentives might be offered to everyone or to select groups. Third,
the marketer must decide on the duration of the promotion. Fourth, the marketer must choose a
distribution vehicle. A 15-cents-off coupon can be distributed in the product package, in stores, by
mail, online, or in advertising. Fifth, the marketing manager must establish the timing of promotion,
and finally, the total sales promotion budget. The cost of a particular promotion consists of the administrative
cost (printing,mailing, and promoting the deal) and the incentive cost (cost of premium or
cents-off, including redemption costs),multiplied by the expected number of units sold. The cost of a
coupon deal would recognize that only a fraction of consumers will redeem the coupons.