Backlog Categorization and Backlog Prioritization are two different things
Backlog Categorization and Backlog Prioritization are two completely different things that seem to get confused pretty easily.
Backlog categorization is used to categorize the backlog items into appropriate groups. These groups might be based on Class of Service, MoSCoW, Kano or any of the in-house categorization technique that people would have developed. (At Kissflow.com we use the WINES model — Winners, Invisibles, Needs, Experience and Sellers )
These Categorization and Classification are vital in forming homogenous sub-sets of items from which items can be picked to be worked on based on business needs. (we will work on 30% Winners, 20% Experience Features, 20% Sellers, 20% Needs and 10% Invisibles)
Prioritization on the other is the act of ordering the backlog based on what needs to be worked on and on what order. In other words it determines which of your winner list (when you classify by WINES) needs to be picked up first and which of your experience fixes need to be done immediately.
Feature prioritization techniques can range from providing relative direction between which feature amongst two needs to be prioritized earlier, to providing a sort order for your backlog. Of course these techniques carry biases and inaccuracies.
Common backlog prioritization techniques include Buy-a-Feature, Weighted scoring, Eisenhower Matrix, RICE framework etc.
There is nothing like a perfectly prioritized backlog. Prioritization is directional in nature rather than instructive, it gives you better leverage in finishing the project systematically. That said a project manager should not assume that his backlog is prioritized merely by categorizing it, thats like assuming you know how to cook a dish by merely arranging the ingredients mise en place.