Product Groups are groupings of Products.  

It may help in understanding to think of them as types of Products.  For example you may decide to have a Product Group called Tables.  And you may have a various Products in that Product Group, e.g. board table, kitchen table, etc.

Grouping Products into Product Groups allows you to report on specific Product Groups.

To set up a new Product Group, from the Main Menu go to Set Up > Product Groups

     

To add a Product to a Product Group, from the main menu go to Setup > Product > Edit.



You should see a page similar to


   

From the drop down list select the Product you wish to edit. 

You should see a page similar to