Trade deals and/or on-package coupons

- We investigate whether or not manufacturers should offer trade deals and/or on-pack coupons.
- Conditions under which either one of the three promotional options is optimal are identified.
- The coupon redemption rate critically affects manufacturers' promotional choices.
- When a choice is possible, manufacturers prefer on-pack coupons to trade deals.
- Retailers may only earn more profits than manufacturers when on-pack coupons are offered.