Get post drop down with category.

functions.php

<?php
function category_terms_with_post_builder( $tax_name = 'product_cat', $post_type = 'product' ) {

	$parent_terms = get_terms( $tax_name, array(
		'hide_empty'	=>	false,
		'fields'	=> 'ids',
		'parent'	=> 0
	) );

	$parent_terms_with_keys = array_combine($parent_terms, $parent_terms);
	foreach( $parent_terms_with_keys as $terms_key => $terms_value ) {
		$child_terms = get_terms( $tax_name, array(
			'hide_empty' => false,
			'fields'	=> 'ids',
			'parent'	=> $terms_value
		));
		$parent_terms_with_keys[$terms_key] = $child_terms;
	}
	foreach( $parent_terms_with_keys as $parent_terms_key => $parent_child_terms ) {
		if( 0 < count( $parent_child_terms ) ) {
			$new_child_array = array_combine( $parent_child_terms, $parent_child_terms );
			$parent_terms_with_keys[$parent_terms_key] = $new_child_array;
			foreach( $new_child_array as $child_key => $child_value ) {
				if( $post_type == 'post' ) {
					$tax_query_args = array( 'cat' => $child_value, 'posts_per_page'	=> -1 );
				} else {
					$tax_query_args = array(
						'post_type' => $post_type,
						'tax_query'	=> array(
							array(
								'taxonomy'	=> $tax_name,
								'field'			=> 'id',
								'terms'			=> $child_value
							)
						),
						'posts_per_page'	=> -1
					);
				}
				$tax_query_posts = get_posts( $tax_query_args );
				$this_cat_posts = array();
				foreach( $tax_query_posts as $posts ) {
					array_push($this_cat_posts, $posts->ID);
				}
				$parent_terms_with_keys[$parent_terms_key][$child_value] = $this_cat_posts;
			}
		} else {
			if( empty($parent_terms_with_keys[$parent_terms_key]) ) {
				if( $post_type == 'post' ) {
					$tax_query_args = array( 'cat' => $parent_terms_key, 'posts_per_page'	=> -1 );
				} else {
					$tax_query_args = array(
						'post_type' => $post_type,
						'tax_query'	=> array(
							array(
								'taxonomy'	=> $tax_name,
								'field'			=> 'id',
								'terms'			=> $parent_terms_key
							)
						),
						'posts_per_page'	=> -1
					);
				}
				$empty_tax_query_posts = get_posts( $tax_query_args );
				$this_cat_posts = array();
				foreach( $empty_tax_query_posts as $posts ) {
					array_push($this_cat_posts, $posts->ID);
				}
				$parent_terms_with_keys[$parent_terms_key]['skipthis'] = $this_cat_posts;
			}
		}
	}
	return $parent_terms_with_keys;
}

function custom_menu_builder( $tax_name = 'product_cat', $post_type = 'product' ) {
	$menu_object = category_terms_with_post_builder( $tax_name, $post_type );
	$menu_html = '<ul class="sub-menu">';
	foreach( $menu_object as $grand_parent_key => $grand_parent_value ) {
		$menu_html .= '<li class="menu-item-has-children">';
			$menu_html .= '<a href="javascript:void(0);">'.get_term($grand_parent_key, $tax_name)->name.'</a>';
			$menu_html .= '<ul class="sub-menu">';
			if( ! array_key_exists( 'skipthis', $grand_parent_value ) ) {
				foreach( $grand_parent_value as $grand_children_key => $grand_children_value ) {
					$menu_html .= '<li class="first-child menu-item-has-children">';
						$menu_html .= '<a href="javascript:void(0);">'.get_term( $grand_children_key, $tax_name)->name.'</a>';
						$menu_html .= '<ul class="sub-menu">';
							if( !empty( $grand_children_value) ) {
								foreach( $grand_children_value as $last_child_value ) {
									$menu_html .= '<li class="last-child">';
									$menu_html .= '<a href="'.get_the_permalink($last_child_value).'">'.get_post($last_child_value)->post_title.'</a>';
									$menu_html .= '</li>';
								}
							}
						$menu_html .= '</li>';
					$menu_html .= '</ul>';
				}
			} else {
				foreach( $grand_parent_value as $post_ids ) {
					foreach( $post_ids as $post_id ) {
						$menu_html .= '<li class="last-child">';
						$menu_html .= '<a href="'.get_the_permalink($post_id).'">'.get_post($post_id)->post_title.'</a>';
						$menu_html .= '</li>';
					}
				}
			}
			$menu_html .= '</ul>';
		$menu_html .= '</li>';
	}
	$menu_html .= '</ul>';
	echo $menu_html;
}