Quote Word template - product categorization

What is the easiest way to categorize sales line items in Word Quote? It can be in the same table or by category in separate tables.

We are not using Product catalogue, instead we use only write-in products and have custom field for product type. 

I'd prefer using docx (XML), but mail merge Word file is ok too. 

Is there any simple app to do this?

This is for Dynamics CRM online.

Thanks.

Suvi