Product categories are groups of items that share similar characteristics or functions. They help consumers easily identify and compare products. Common examples include electronics, clothing, and furniture. Each category can have subcategories, such as smartphones under electronics or formal wear under clothing. Businesses use product categories to organize their offerings and improve marketing strategies. By categorizing products, companies can target specific audiences and streamline inventory management. This organization also aids consumers in making informed purchasing decisions, as they can quickly find what they need within a specific category.