The new Item Categories feature replaced the Product Group feature in Dynamics NAV 2017

To help companies maintain an overview of their items and to help them sort and find items, it is useful to assign item attributes to items and to organize them in item categories. When customers inquire about an item, either in correspondence or through a web shop, they can then ask or search according to attributes, such as height and model year. In such a system, a category is a parent in a hierarchy of loosely coupled child attributes.

Bron : Dynamics NAV Team Blog
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