Item Group is the classification category. Depending on the type of product, categorise it under its respective field. If the product is service oriented, name it under the group head - service. If the product is used as a raw-material, you have to name it under the Raw-material category. In case, your product is used only in trading, you can categorise it under Trading.
Create a Item Group
Select an Item Group under which you wish to create the group.
Select 'Add Child'
Delete an Item Group
Select the Item Group you want to delete.
Next: Item Attribute