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Sir,
In simple words if same invitation or report of our company has to be sent to number of potential users of it then we use mail merge which combies data from two different like Excel & Word for address and contact persons etc.
With Mail Merge information (Name, address, Phone # etc.) from a data source can automatacially be added in word document.
For example if you want to send same letter to50 different people. Using Mail Merge you don't need to type or copy paster their Name, address and other information again and again.
https://www.google.ca/?gfe_rd=cr&ei=Yd8yU_6cCaKD8Qef1IDQCQ#q=what+is+mail+merge
It is like you want to write a same letter (only change in few keywords) to many people, you can use mail merge.
Like sending a "Thanking / Invitation Letter" to to many people, only name & addresses or other few fields will be change, So this tool will replace those fields record by record and create letters on same formats for you.
THIS IS EASY & FAST TOOL TO COMMUNICATE WITH NUMBERS OF PEOPLE AT ONE TIME, it reduces your energy and resources to move in busy professional life.
