Set a variable
export NAME=DAVE
Validate the variable
echo $NAME
DAVID
Initialise a file
echo "DAVE"> foobar.txt
Validate the file contents
cat foobar.txt
DAVE
Replace the contents of the file with the contents of the variable
sed -i''"s/DAVE/$NAME/g" foobar.txt
Validate the file contents
cat foobar.txt
DAVID
This works with Bash 4.1.2(1)-release on RHEL 6.6.