As new and better products are developed, they are launched in the marketplace and their fate is determined by votes of consumers through their purchase or rejection of the products. New-product introductions are becoming more expensive, and the chances of product success are less than in previous years. Thus it is important to understand the nature of an innovation and how individuals and groups of consumers adopt them. The term "innovation" can be defined in several ways. One view based on consumer perceptions defines it as "any idea, practise, or material artefact perceived to be new by the relevant adopting unit." Another view establishes a continuum or range of newness based on the product's effect on established consumption patterns. Under this conception three categories of innovation are classified as described below:.
1. Continuous innovations have the least disrupting influence on established consumption patterns. Product alteration is involved, rather than the establishment of a totally new product. Examples of products that are representative of this situation are fluoride toothpaste, new-model automobile changeovers, and menthol cigarettes.
2. Dynamically continuous innovations have more disrupting effects than do continuous innovations, although they do not generally alter established patterns. These may involve the creation of new products or the alteration of existing items. Examples of this world include electric toothbrushes, electric autos, wall-sized television screens, and video telephones.
3. Discontinuous innovations involve the establishment of new products with new behaviour patterns. Examples of these situations would include television, computers and automobiles." .
Overall innovation can be divided in to 4 different groups:.
• Firm Oriented Innovation.
• Product Oriented Innovation.
• Market Oriented Innovation.
• Consumer Oriented Innovation.