What is a product hierarcy, why and where it should be used?

Hi
Please give a small brief about product hierarcy
Thanks
Suddu

Product hierarchy is an alphanumeric character string for grouping together materials by combining different characteristics. It is used for analyses and price determination.
The product hierarchy on the Basic Data screen is used to depict the competitive materials of competitor 1 in relation to those of competitor 2. Here, your own company and its materials are also regarded as a competitor and as competitive materials respectively. You can use this representation as a basis for market analyses.
You normally enter competitive materials using material type WETT. When entering your own materials as competitive materials, you can, however, display the product hierarchy on the Basic Data screen for other material types too.
If you have created materials at sales organization level, the system warns you on the Basic Data screen that the product hierarchy may differ at sales organization level.When you create new records at sales organization level, the system proposes the product hierarchy from the Basic Data screen.
The Tcode to create Product hierarchies is OVSV>

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