What is a good market requirements document template?
Deeply understanding your market landscape is essential to product leadership. Product managers track market trends, identify new opportunities, and plan for risks. And it is not just a bunch of research and information collecting. Market analysis combined with customer knowledge allows you to plan and build a better product. In essence, you are serving as an advocate for your customer in the market.
A market requirements document (MRD) can be useful for consolidating high-level market research. It includes key data such as market size, target customer characteristics, and the competitive landscape. It is a tool to help product teams validate and align on what is happening in the market — so you can gain an advantage over other solutions in the marketplace and ultimately better meet your customers' needs.
Do not confuse an MRD with a product requirements document (PRD). PRDs define the purpose of a product or feature and provide details on how the product should be built. Some teams still use these as guides for the work that design and engineering teams complete. The MRD is created before the PRD — those findings inform PRDs. The product team needs to clearly understand the market and customer needs before working with design and engineering to define product requirements.
Given this context, it makes sense that MRDs are often created when initially launching a product. But you can revisit the MRD periodically, including when you are planning a big product enhancement. If your MRD is lightweight and flexible, you can cycle in fresh insights to keep the team engaged in thoughtful product planning.
Key components of the MRD
Product managers are typically responsible for the MRD. Because the document contains customer and market research, you may collaborate with product marketing or the broader marketing group as well. These are the common components included in an MRD:
Executive summary: What problem are you trying to solve?
Vision: What makes your product or service unique?
Target market: How big is the opportunity or market size?
Personas: Who are you solving the problem for?
Competitor analysis: What alternatives currently exist?
High-level capabilities: What functionality must be included to solve customer needs?
Metrics strategy: How will you measure success?
Let's explore each component in detail below. You can also download this free MRD template to get started on your own.
The executive summary is a condensed version of the entire document — with top-level objectives, customer challenges, and proposed solutions. It typically includes these sections:
Overview of the target market size, current market share, and important trends
Product goals that are specific, measurable, and time-bound
Opportunities and threats
Opportunities for success in the market and threats from competitors, market conditions, and other external factors
Primary customer problems you are solving
Proposed solutions to help address customer problems
Product vision represents the core essence of your product — where you are headed and why it is important. It sets a clear direction that guides product goals, initiatives, and decisions.
A simple, aspirational statement that captures the future of your product and why it matters
Factors that distinguish your product from other solutions in the marketplace
The target market section includes industry data and customer details to substantiate the market opportunity. You can use this section to capture information about both existing and potential markets.
The category of the market that your product is classified in — such as cloud services, e-commerce, and healthcare, among many others
The number of potential customers who would benefit from buying your product — often measured as an estimated revenue range. For example, you can calculate market size by multiplying the number of potential customers in your market category by their average annual revenue.
Refers to the percentage of sales in the industry earned by your product. Divide your product sales by total sales for the market (via industry data) to determine market share.
Key customer segments
Potential customer segments that will use your product — segmented by demographics, psychological attributes, geography, or behavior
Primary pain points felt by your customers
Fictional representations of your customers, including demographic information, goals, challenges, and preferences. See the Personas table below for more information.
Companies that offer similar products or services within the same market. See the Competitor analysis table below.
Channels available for communicating with your target market — such as email, website, and referral
Personas are fictional representations of the real people who interact with your product. Well-defined personas help you empathize with your customers, understand their needs, and build a better product. You can create a unique persona to represent each customer type.
A name that helps define who the persona is
A high-level description of their job, role, and interests
Years of experience in their role or position
Functions, tasks, and competencies as part of their role
Average level of school years completed
Their familiarity with your product — i.e. high, medium, low
Personal or professional objectives
External or internal factors that block progress towards their goals
Preferences related to products and services that solve their challenges
Dislikes related to products and services that solve their challenges
Trusts information from
Sources they receive information from and respect
Other people in their organization that they have influence over and share information with
The competitor analysis section outlines other solutions that offer similar products or services to yours. Understanding the other options available to your customers can help you differentiate your product in the marketplace. Complete this section separately for each major competitor.
Name of competitor
Their mission statement or high-level business objective
A summary of the organization and any distinguishing features (often found on the company's "About us" page)
Products or services they provide
A rough estimate of company revenue, if available
Their target customers and how they differ from your own
Areas in which they excel
Areas in which they are lacking (or for which your product excels)
Factors that make them unique or compelling in the market
This section of the MRD turns to your product's capabilities — how it will help customers solve the problems you have defined. At this point, avoid detailed design and development specifications. This is a high-level summary to help the product team align on what needs to be built.
Jobs to be done
The jobs or tasks that your customers need to complete
Current challenges faced by customers that your product will solve. If you are completing this section of the MRD for an existing product, you can include current difficulties that customers are experiencing with the product.
Functionality that customers want — based on customer feedback
This final section focuses on performance metrics and is typically tied to your business model. For a new product, you will look at high-level objectives and metrics. For a new feature set, you will zero in on the impacts of the new features.
Projected revenue of the product (or impact to revenue of new features)
Product pricing (or new pricing based on added functionality)
Key objectives and metrics
Desired long-term impact of your product or new feature set — including metrics for success
As you build the MRD, keep it concise — remember its purpose is to identify opportunities to stay competitive and meet customer needs. Store it in a central place that is accessible to stakeholders and easily editable for any ongoing modifications.