Merge query in sql server 2008

Create a target table

CREATE TABLE Products
(
ProductID INT PRIMARY KEY,
ProductName VARCHAR(100),
Rate MONEY
)
GO

Insert records into target table

INSERT INTO Products
VALUES
(1, 'Tea', 10.00),
(2, 'Coffee', 20.00),
(3, 'Muffin', 30.00),
(4, 'Biscuit', 40.00)
GO

Create source table

CREATE TABLE UpdatedProducts
(
ProductID INT PRIMARY KEY,
ProductName VARCHAR(100),
Rate MONEY
)
GO

Insert records into source table

INSERT INTO UpdatedProducts
VALUES
(1, 'Tea', 10.00),
(2, 'Coffee', 25.00),
(3, 'Muffin', 35.00),
(5, 'Pizza', 60.00)
GO
SELECT * FROM Products
SELECT * FROM UpdatedProducts
GO

Synchronize the target table with refreshed data from source table

MERGE Products AS TARGET
USING UpdatedProducts AS SOURCE
ON (TARGET.ProductID = SOURCE.ProductID)

--When records are matched, update the records if there is any change
WHEN MATCHED AND TARGET.ProductName <> SOURCE.ProductName
OR TARGET.Rate <> SOURCE.Rate THEN
UPDATE SET TARGET.ProductName = SOURCE.ProductName,
TARGET.Rate = SOURCE.Rate

--When no records are matched, insert the incoming records from source table to target table
WHEN NOT MATCHED BY TARGET THEN
INSERT (ProductID, ProductName, Rate)
VALUES (SOURCE.ProductID, SOURCE.ProductName, SOURCE.Rate)

--When there is a row that exists in target table and same record does not exist in source table 
--then delete this record from target table

WHEN NOT MATCHED BY SOURCE THEN
DELETE
--$action specifies a column of type nvarchar(10)
--in the OUTPUT clause that returns one of three
--values for each row: 'INSERT', 'UPDATE', or 'DELETE',
--according to the action that was performed on that row
OUTPUT $action,
DELETED.ProductID AS TargetProductID,
DELETED.ProductName AS TargetProductName,
DELETED.Rate AS TargetRate,
INSERTED.ProductID AS SourceProductID,
INSERTED.ProductName AS SourceProductName,
INSERTED.Rate AS SourceRate;
SELECT @@ROWCOUNT;
GO