You haven't mentioned which version of visual studio you are using. As you have tagged C# 4.0, I am assuming that you are using Visual Studio 2010.
First of all, you need to add a setup project to your solution. If you haven't done this earlier check foloowing for the detailed steps-
How to: Create or Add a Setup Project[
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Then
1. right click on the setup project
2. select
properties
3. click on
prerequisites button
4. select SQL Server
Hope, it helps :)
Update: I apologise. Have proposed wrong solution as I have missed to take "Installshield" in to account.However, if you are using Visual Studio 2012 then you can refer to the following article to get your job done.
Simple Steps to Create Setup File Using InstallShield LE From VS 2012[
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