What Is a Market Requirements Document (MRD)?
“A market requirements document (MRD) highlights information such as an overview of the product, opportunities in the market, consumers, and the analysis of the product. An MRD document is a channel that helps organizations discover opportunities related to the product and the marketplace.”
Product managers or marketing managers write the market requirements document. It contains information about the potential customers, their needs, problems related to the product, and competition in the market.
The market requirements document helps in outlining and planning the market strategy. It precisely states the market requirements.
The Market Requirements Document Revolves Around the Following Necessary Questions:
- What is the product?
- What is the target market, and is it worth targeting them?
- Who are our customers(users) and buyers?
- What are the competitor products?
- What’s unique about our product, and what problems are we trying to solve through them?
- In what ways will we solve the issue?
- What will the revenue be from this market?
How Do You Understand Market Requirements?
We will elaborate on some of the above questions. This section will help you understand the market requirements and work as a foundation to craft a market requirements document template.
- What Is Our Target Market, and Is It Worth Targeting Them?
Determine what industries your product will better fit in, new markets, and how you can enter that market.
- Who Are Our Customers (Users) And Buyers?
Get to know the buyers and user personas of your target market.
For example, if you are thinking of building a tool focusing on data extraction for nontech business analysts. Then they will be your users. And your buyers could be executives and business managers who need data reports.
- What’s Unique About Our Product, and What Problems Are We Trying To Solve Through Them?
Understand the problems your users face and get to know in detail if your product successfully solves those issues.
Building from the above example, we could say that you need a sufficient amount of time beyond manually putting data into sheets. You can utilize this time to make better product decisions by teams.
Your tool will help them do all of this data extraction promptly.
- In What Ways Will We Solve the Issue?
Even though it is unnecessary to have all the features and detailed descriptions in the market requirements document, it would be best to write short reports. You can mention the aspects of your tool that will solve the problem.
- What Will the Revenue Be From This Market?
Estimating your revenue will help you decide the market share and income you can potentially generate through your product.
You will have to estimate the fees you can charge monthly, licensing, and the number of users.
You can use different estimation tools such as total addressable market (TAM), monthly recurring revenue (MRR), and so on.
What Is the Purpose of a Market Requirements Document?
- An MRD document helps articulate the definition of the market you are targeting.
- Guide the teams to get a detailed analysis of the buyers and the user personas
- Provides detailed information on the problem situations and the issues users face currently.
How To Create a Market Requirements Document?
To create the marketing requirements document, you should consider the following factors:
- Executive Summary: The problem you are trying to solve.
- Vision: What is the core objective of your product, what is unique in it, and what do you aim to achieve with the product.
- Target market: The market size.
- Personas: The people for whom you are launching your product, whose problems will be solved.
- Competitor analysis: What different approaches do they follow, how much hold they have on the market, and how can you outperform them.
- High-level capabilities: These are the capabilities of your product service. It has to be better than the competitor and more fulfilling.
- Strategy for metrics: Metrics help in measuring the impact of your efforts.
Market Requirements Document (MRD) Vs. Product Requirements Document (PRD)
The terms market requirements document (MRD) vs. product requirements document (PRD) are often used interchangeably. But they serve a different purpose.
This article shows that the MRD document focuses on problem scenarios and target markets. The document format MRD document uses is spreadsheets and word docs.
A PRD contains the information the development team will require to know a company’s features and functionalities that need improvement. It helps the teams understand what and how to build the product.
One thing to remember is that the MRD document comes first, and PRD follows. Hence, they complement each other.
Preparing an MRD document at the initial stage of product development helps in time and resource management and provides some ease to the later stages of development.
It helps in business as it focuses on gaining market and consumer insights.
It is a collaboration of the product manager with the product marketing team, with the manager having significant responsibilities.
For a market requirements document, you need to document these necessary points:
- Understanding the problem that the customer is facing.
- Conduct competitor analysis.
- Conveying the vision of your product.
- Identify the persona; the people for whom you are launching the product.
- Document the target market.
- Capabilities and capacity of your product.
- Make a metrics strategy.