Let's say you sell game consoles on your site...things like Playstation or X-Box. Well, you would probably want to show off certain products that would compliment your customer's purchase. For example, if they are looking at the Playstation 2 product_info.php page, you can create a family called "Playstation 2 Accessories" that consists of games, controllers, remote controls, and other misc stuff. Then when the user sees the main product they want to buy, you are "reminding" them that they will probably want to look the the other available complimentary products.
It is called Family Products because the idea was you would assign products into a "family" and that family would be called whenever a product was called that belongs to a family. In the example above, games for the Playstation 2 would also show when a customer is looking at Playstation 2 controllers, or any other product found in that "family."
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