What is Market Requirements Document?
A market requirements document (MRD) is a strategic document that details the market opportunity, including the market size, the target audience, and competitors. It is aimed at grasping the customer needs so that product managers could define the requirements for and expectations from the product. Typically, an MRD is written by a product manager or a product marketing manager and includes the product’s vision, business analysis, revenue estimation and a high-level list of product features.
When Is It Used?
An MRD is a tool that is traditionally used in waterfall projects and in phase-gate development to gain a deep understanding of customers’ wishes and demands. These approaches rely on upfront documentation, so MRDs are usually created in the early planning stages.
However, an MRD is not a stale document; it can be periodically revisited to respond to the market changes and evolving customer needs. It can be also used by Agile team, yet in this case, it is a short version simply summarizing market needs.
MRD Structure
To be useful, an MRD must articulate who the target users are, why they would prefer your product, what is required for the product's success, and provide an overview of how this product will be built. A strong MRD provides in-depth information about the opportunity for the product and the customer needs based on the following key components:
Executive summary: a condensed version of the whole MRD that lists high-level objectives, customer pains, and the solutions. An executive summary defines the problem that a product is solving.
Product vision: the direction of the product development that guides its goals, initiatives, and product-related decisions. It also states why the product is unique and important for potential customers.
Target market: information about the existing and potential markets, including its size, customer details, and industry data.
Personas: fictional representations of potential users of the product, including their job, goals, preferences, needs and pains.
Competitors: the analysis of alternatives available to the customers. Learning about other solutions helps differentiate the product and better define its niche.
High-level features: essential functionality that must be included to meet customer requirements without detailed design or development specifications.
Metrics strategy: high-level performance metrics that are used in your business model.
Tips to Writing an MRD
Writing a traditional full MRD is a lengthy process that blocks the product development and is not flexible enough to align to the changes in customers’ preferences or needs. For that reason, many teams either use dedicated software, like Aha! Roadmaps, to speed up collaboration in the cross-functional setting or use templates to achieve consistency and save time. Regardless the chosen approach, there are several best practices that make an MRD more powerful:
1. Ensure that the MRD provides good communication:
- write from the user’s, rather than from the developer’s perspective;
- use screenshots to make your statements more visible;
- use simple languages, do not overuse jargon;
- include a glossary with all important terms and concepts to avoid confusion
2. Ensure that the requirements are described well:
- keep them high-level, specify what and why shall be done, but not how is must be implement
- define target audience and market
- include non-functional requirements
- set prioritize
3. Establish requirements management practices:
- review and update requirements to adjust the MRD to the market changes and customer feedback
Writing an MRD as the first step before investing resources to development reduces waste, validates the market need, and gets the team aligned on the product vision.
