(The placeholders mean nothing to Word, and you can use any visual clue you want.) When setting up the merge, you'll replace those with the merge fields that are mapped to the Excel fields, accordingly.
These are a visual clue to you that you need to merge fields to display the personalized data. The Word template has a number of textual placeholders, denoted by the characters-member's name, address, and membership type. Figure A: You'll need a template and information file to start.