Lead generation is vital part of a business. Trying to attract new customers is a kind of lead generation.

Every business always tries to present itself better than competitors. Referrals are common in most types of business.

In general Lead Generation means, anything that involves to attract or create interest in new or potential customers.
Some common lead generation techniques are tele-marketing, direct mail, referrals, trade demonstrations, seminars, advertising and requests for quotes and proposals.
These methods have proven potential to generate prospect if done correctly.

Advertising is certainly the most used way to generate leads.

A response to advertisement is often new customers. Proposal request and quote request often involve prospect. For example, If a student enquires about fees and other details in a college, then the college has generated a lead.

Direct mail is another technique which involves sending out fliers or brouchers to a large number of people hoping of getting new customers.

And when the employees of business make cold calls to list of prospects, they are tele-marketing. This is done with the hope that some callers will listen and become interested by the employees act of pursuasion.

Trade demonstrations and seminars are for people who are already interested in the demonstrated product. This at times will also get new customers and leads.

Any sales related operations needs lead generation. And now generated leads is also sold to companies ( new business ain't it ? ).
Yes There are also firms which use personal information to make lists of prospects with it and sell to interested companies. Else companies would solely rely on repeat business from existing customers if they do not know who may be interested in their product...