What is a market requirements document (MRD)?
A market requirements document (MRD) describes an overall market opportunity — including the size of the market, the types of customers you will target, and competitors in the space. An MRD helps to consolidate your market research into a convenient overview. It also outlines the high-level product capabilities required to meet customer needs and gain an advantage over other solutions.
An MRD is often confused with a product requirements document (PRD) but they have distinct purposes. While an MRD summarizes market and customer needs, a PRD describes how the product should be built to meet those needs. Because the MRD informs the PRD, you should create the MRD first — this ensures the product team clearly understands your prospective customers before you build solutions for them.
In this guide we will explore the benefits of writing an MRD and what to include in yours. This will provide you with a foundation for working in Aha! Roadmaps to define MRDs and then manage product development end-to-end. If you want to get started quickly, Aha! Notebooks offers a lightweight MRD note template — which comes with helpful hints and instructions. That way you can easily write, update, and validate your MRD as you gain new insights.
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Who writes a market requirements document?
Product managers typically create an MRD with the help of product marketing and other cross-functional team members. This often happens in the early planning stages of a new product launch — but shifting market trends and evolving customer needs are good reasons to revisit the MRD periodically. This is especially helpful when you are planning a significant product enhancement and want to confirm that what you are delivering aligns with the opportunities that exist in-market.
Traditionally, teams using a waterfall approach would create MRDs to document in-depth market and customer research before development was underway. Today, many product teams use MRDs to consolidate high-level findings in a more flexible manner — where not everything has to be defined upfront. Some agile product development teams also craft shorter versions of MRDs as brief summaries of what is happening in the market before writing more detailed user stories.
Some teams might view the traditional, lengthy process of writing MRDs as outdated. But even if you do not write a formal MRD, the exercise of thinking through the market opportunity is always beneficial — and necessary. This lays the foundation for your product strategy. By evaluating the market need and alternate solutions that are available, you can establish clarity on the problems you want to solve. This helps to align the team on what you are building and why — giving you direction for setting goals.
Writing an MRD can also help reduce waste. Once you determine that an opportunity is worth pursuing, an MRD will help you outline what your product requires to succeed — before investing time, money, and resources into building it.
Related: How to find product-market fit
What does a market requirements document usually contain?
An MRD should articulate the opportunity you are pursuing, what your target customers are looking for, and your high-level plans for delivering your solution. Most importantly, everything you include should be rooted in research.
The fastest way to get started is with our guided MRD template in Aha! Notebooks. You can also try downloadable MRD templates for Word or Powerpoint or starting from scratch. No matter the format you choose, these are the key components an MRD should contain:
What problem are you trying to solve?
Provide a concise report of your findings, assumptions, and suggestions — almost like a miniature version of the entire document.
What makes your product or service unique?
Define your vision — this represents the core essence of your product. It should set the direction for where you are headed and all that you hope to accomplish.
How big is the opportunity or market size?
Detail the specific market size and document any assumptions or facts that validate the market opportunity is viable.
Who are you solving the problem for?
Describe the customer personas you want to target with your planned solution.
What alternatives currently exist?
Share how customers are currently solving problems via competitor analysis. This type of research helps you differentiate your offering and establish a competitive advantage.
What functionality must be included to solve customer needs?
Write an overview of the functionality required to effectively meet customer needs. Avoid detailed design and development specifications at this stage — instead, outline the solution from the customer's perspective by describing what problems they want to solve.
How will you measure success?
Connect to your business model. Consider how the company will generate income from your new product, how pricing will be structured, and the key metrics you will use to track achievements.
Once your MRD is complete, you can turn your attention to the next step — defining how your new product or features should be built. This is where creating a PRD can be helpful. To get started, try using a PRD template to make sure you capture the right details.
A more dynamic approach to defining market requirements
MRDs are useful tools for understanding the market you operate in. But the traditional method of creating long-form MRDs can be a lengthy process. By the time it is finished, the information in it might become a bit stale. And if you write a new MRD for each release, you may need to manually update and share it each time — this can be even more time-consuming.
That is why many product development teams use purpose-built software to work faster, iterate, and collaborate in real time with cross-functional colleagues. With Aha! software, not only do you have access to the MRD note template — you can define a vision, capture personas and competitor data, and link your strategy to actual day-to-day and development work. That way you can spend less time on documentation and stay focused on delivering value to customers.
Set strategy, gather customer feedback, and report on progress — all in one place. Try Aha! Roadmaps free for 30 days.
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