Android developers and it appears Google has finally decide to oblige and bake the functionality straight into the Play Store. In its current state, it is executed in a pretty straightforward manner.
Promotion codes can be issued through the developer console and then distributed in any way the developer deems fitting for his marketing needs. Each code can only be used once and redeemed either towards a paid app as a whole or a particular in-app purchase.
Currently the code can only be used to make an item free, no discount options are present in the initial version. Also, you cannot create codes for subscription content yet. There are also a few other limitations to the functionality. App owners can only issue up to 500 promo codes per quarter.
This quota can be used towards any number of combinations between free app coupons or in-app purchases (if the app happens to have both). Unused quotas do not roll over form quarter to quarter and there are also time restrictions on the validity of codes