How do you use Excel's 'SUMIF' function?

Instruction: Describe the functionality of the 'SUMIF' function and provide an example scenario where it could be effectively utilized to perform conditional summing of data.

Context: This question is designed to evaluate the candidate's knowledge of Excel's 'SUMIF' function, which is essential for summing data based on specific criteria. The candidate should demonstrate their understanding by detailing how this function operates and by presenting a practical use case relevant to data analysis or business operations.