Following are the steps that needs to be followed in order to create Email template for MassMailer app.
Step 1 : First of all create an empty Letterhead to avail it for email template
a) Setup --> Communication Templates --> Letterheads
b) Enter the Letterhead Label and make the checkbox Available for use checked.
c) Letterhead Unique Name will automatically filled. Put Description based on the requirement.
c) Click on Save.
d) Click on Save, Shown below
Note:Do not Customize the letterhead.
Step 2: Creating an Email Template:
a) Go To: Setup --> Email -->My Templates
b) Click on New Template and Select HTML(Using Letterhead).
Note: Available for use check box should be checked.
c) Select the Folder.
d) Enter Email Template Name.
e) Template Unique Name will get filled automatically
f) Select the Blank Letterhead created above.
g) Select Email Layout and you can see the Email Layouts by clicking on the Link View Email Layout options
e) Default selection of Encoding
f) Enter Description as per necessity and Click on Next
d) Enter the Subject
e) Create your template according to your requirement.You can also enter Images and Merge fields.
Note: Select Merge fields of that object only for which this template is to be used.For eg. if you are sending email to contact then use contact merge fields.
f) Click on Next
g) Enter the Text-only version of your email template.This is what recipients will receive if they cannot view HTML emails
h) Click on Save.Your template is Ready to use.
Note : You can also go through following links given below to see how templates are created in Salesforce.