Item Cross Referencing

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We have a requirement where Items must be grouped under Master Group immediately. e.g. Say a Crocin and Calpol are 2 different Items but both fall under Chemical Group Paracetamol. We want to know where in the Item Master of Crocin and Calpol we should enter Paracetamol.

Q 1. After searching it appears that we can use the function known as :Cross Referencing. Please confirm if we are on the right track. if not please suggest what we should do.

Though Cross referencing typically mentions use as Old Item codes tagged to New Item Codes but I presume we can still have a One to Many Relationship.