| Limited market and intensive competition force many enterprises to join the war of price reduction and all kinds of sales promotion. However, to what level of return has the sales promotion brought to the company has been a question concerned many companies, but there is not a clear answer to this question yet. To answer this question, it is critical to treat sales promotion as an activity of investment, and quantitatively evaluate various means of sales promotion and their return on investment (ROI). This thesis takes the sales in a car dealer as a case to introduce how to use regression model to evaluate the effects of various types of sales promotion on sales volume, analyze their return on investment (ROI), and establish a forecasting model.The empirical results show that price has a negative relationship with sales volume, while all types of sales promotion have positive relationship with sales volume. The most effective types of sales promotion are price reduction and gift package. The return on investment of different types of sales promotion varies. Gift package is more effective for some models while price reduction is more effective for some other models. Meanwhile, we also find that the most effective types of sales promotion have not been used most frequently, which means that the company has not implemented the optimal plan of sales promotion and consequently lost some opportunity sale volume. In addition, this study also shows that the effects of Sales Index is better than expected, which implies that the company should continue and further improve this program. ] The model stabled in this study can forecast sales volume in the future, which can be a powerful strategic weapon for companies in the market competition. Overall speaking, the method introduced in this thesis can be effectively used to evaluate the effectiveness of sales promotion and establish forecasting model, and help managers to make optimal decisions on sales promotion.
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