Email marketing is the act of sending a message, typically to a group of people, using email.
In its broadest sense, every email sent to a potential or current customer could be considered email marketing. But here we are talking about large contact lists (from 50 to potentially 1000s).
If you send that number of emails from your email program using mail merge or (illegally) using the BCC field then you will not be making the best use of your time. Also, there is so much that you need to include to comply with Data Protection Act that you run the risk of getting something wrong and someone reporting you.
However, communicating regularly with prospects is vital for getting repeat business by telling them about new services, products and special offers: e-mail marketing helps you stay in touch with your customers at a fraction of the cost of other communications methods.