Mail merge is a function that helps you to simplify repetitive tasks to create personalized documents (Forms, Letters, Address Labels, Envelopes, etc.). You can create a mail merge template that would contain the variables (merge fields) in it. Using the template, you can merge data from CRM and create the merged documents with accurate values for the variables. 
Suppose you have to send personalized letters to numerous leads. In such cases, you need not manually type the details of each lead in the letters to personalize them. Instead, you can simply create a template with the merge fields from the leads module and later merge the data to get all the personalized letters.

Create Template Folders

Template folders are useful to manage the different mail merge templates that you have created.

To create a template folder

1. Click Setup > Templates > Mail Merge Templates.
2. In the Mail Merge Templates page, click Create Folder.
3. In the Create Mail Merge Templates Folder page, enter the Folder Name.
4. Click Save.