Mail merge is a software operation to merge a single document template and a structured data source (mostly CSV) in order to produce multiple documents. A typical scenario is to create personalized letters and pre-addressed envelopes.
The operation of mail merge is generally carried out using a word processing program like MS Word. There also exists many mail merge software applications in house or on the shelf.
For more technical details and examples of mail merge using MS Word, please refer to
Word mail merge: A walk through the process (Microsoft Online Help)
Open Contacts can provide needed data source in the form of XML file or CSV file.
Mail Merge with an XML File
Presumably you have a mailing list with contacts in a category.
Please notes, designing XSLT/XSL-FO requires advanced computer knowledge and skills such as XSLT programming. Generally you would do mail merge with a CSV file only.
Mail Merge with a CSV File
Recommended mail merge programs:
Advanced Postal Address Management for Mail Merge
Open Contacts is an advanced address book program which separately manages personal contacts and organizational contacts. And you can link multiple persons to an organization. It is common that you need to send multiple contacts to the same address of the same organization. It will be handy that you can use the organization's postal address for these contacts, while other contacts may have their postal address defined in one of the sections.
From version 5.0.5, Open Contacts provide features to define postal address for mail merge. You may define the address of a section or the address of a linked company. For more detail, please refer to the developer pages.