Product categories can defined from Sales > Configuration > Product Categories

For each of the product a category can be associated. Sales > Product > Products Product category on general information tab.
Am assuming the sales person is going to create a new quotation, add a product, click search more, on that product list screen category can be added by clicking on double arrow extreme right on the header row.
On the search down arrow, group by category.. is this what you are referring to?
On the search field the sales person can also type TITAN to view all the products
Sorry, it is not clear if you are asking for navigation screens or configuring product categories

@Jaideep thanks for the response again.
This is how I have my products listed for this example "Titan" set.

- TITAN | Set (this item is only made available via BOM and MO
- TITAN | Console
- TITAN | Armless Chair
- TITAN | Corner Wedge
- TITAN | Recliner -> **Variant (Right)
- TITAN | Recliner -> **Variant (Left)
- TITAN | Recliner -> **Variant (Armless)

As you can see, typing TITAN for every component is quite tedious. I'd like to make it less cluttered. Ideally I wish that "Titan" was the parent and all the child components could just be related to "Titan" instead of having to write it out every time. I also need to figure out a solid naming/organization convention before I mass import a bunch of these sets. These sofa/sectional sets are the hardest to import since they are so modular and have so many variations in its components.

Yes, that is correct. You wouldn’t need to add TITAN to every product name. If you have a category as TITAN all these components will come up on search.
You do however need to create an additional product (TITAN Set -consumable type) that has the BoM (kit type) with individual products.

Yes, I currently have "TITAN - SET" as a separate item that has a BOM. So would you add "Titan" as a product category in the product template page? This is the part that has been tricky for me. If not, where would you put it? I'm trying to come up with a solid system before I mass import a huge dataset with all variants. THANKS JAIDEEP

Would it "TITAN" be under product category or do I make an attribute called Category and add "TITAN"?

I would have TITAN as category with parent category Sectionals.

You would need attributes for variants eg recliners, left, right or armless