If you keep a lot of appointments and meetings on your Outlook calendar, adding color categories lets you scan and visually associate similar items. You might assign all personal items to the green category and all important items to the red category
When you assign a color category, that color is used as the appointment's background color on that calendar grid.
Tip You can assign shortcuts to any of the color categories consisting of hitting CTRL + any of the F# keys. After clicking an appointment, meeting, email message, or contact, you can then use the shortcuts assigned to quick assign any of these things to your color categories.