Market Requirements Document: Don’t Skip This Step

Updated: May 7, 2025- 14 min read

Before any product gets built, there’s one question every team needs to answer: What exactly are we building and why?

That’s where the Market Requirements Document (MRD) comes in. It’s not flashy, and it doesn’t get much attention outside the product team — but it’s one of the most useful tools you can have when setting direction.

In this piece, we’ll break down what an MRD is. We’ll see what it should include, when to create one, and how it fits into your product development process. We’ll also clear up how it’s different from a Product Requirements Document (PRD)—and when to use each.

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What Is a Market Requirements Document (MRD)?

A Market Requirements Document, or MRD, is a foundational piece of product documentation. It captures the "why" behind building a product or feature. It outlines the market problem, target customers, and high-level needs, without diving into how the product will work or be built (that’s for the Product Requirements Document to define).

The MRD helps product teams, executives, and stakeholders align on what the market actually needs before jumping into product specifications.

Think of it as a bridge between market insight and product strategy. It ensures you're not building based on assumptions, internal pressure, or the latest competitor feature, but based on actual demand.

What is the purpose of MRD Requirements?

““The best strategies come by talking to customers and seeing where the market is headed.” ”

— Karandeep Anand, President & CPO at Brex, on The Product Podcast

Imagine you’re building software for B2B event organizers. After a round of customer discovery interviews, one customer says: "We lose hours every week manually entering attendee data into our CRM. If your platform could sync that automatically, we’d switch in a heartbeat."

An MRD would take that feedback — not as a feature request, but as a signal.

It would document the broader problem: mid-sized B2B event organizers need tighter integration between event tools and CRMs to save time and reduce errors. From there, the product team can explore solutions in a Product Requirements Document (PRD).

So, in practice, an MRD helps answer these questions:

What market or customer problem are we solving?
Who is experiencing this problem?
How widespread or urgent is it?
What opportunities exist if we solve it?

The purpose of an MRD is to:

Guide product strategy with real market insight
Help prioritize initiatives based on validated needs
Align stakeholders around a shared understanding of the problem
Provide context for downstream decisions (UX, tech, go-to-market)

In short, an MRD keeps your team focused on building the right thing—before figuring out how to build it right.

What an MRD Should Include, When to Create One, and Where It Fits

The Market Requirements Document is a tool to bring clarity to product decisions before resources get committed. To get the most value from it, you need to know what to include, when to create it, and how it fits into the larger product management process.

What a good MRD covers

An effective MRD focuses on the problem space, not solutions. It’s less about product specs and more about insight. A solid MRD typically includes:

Market problem
A clear description of the problem or pain point your product or feature is solving. This should come from real data — customer interviews, product analysis, usage trends — not guesses.
Target audience
Who is experiencing this problem? Use this template to include user personas or segments, buying roles, and key demographics. If it's B2B, this might include company size, industry, or tech stack.
Use cases and scenarios
Real-life examples of how and when the problem shows up in users' lives. This makes the document relatable and useful for cross-functional teams.
Market opportunity
Why solving this problem is worth your team’s time. This could include data on market size, competitive gaps, or the urgency of the need.
Customer insights
Direct quotes, themes from user research, or patterns from support tickets that reinforce the problem.
Business goals
What outcomes this solution supports — revenue growth, user retention, expansion into new markets, etc.
Success criteria
High-level indicators that would show whether the market problem has been effectively addressed.

This isn’t a template to blindly fill out, it’s a strategic document. If a section doesn’t add value or isn’t backed by insight, it doesn’t belong.

When to create a Market Requirements Document in Product Management

The MRD should be created before the Product Requirements Document (PRD). It’s part of your customer discovery and process, specially throughout the interviewing stage.

Ideally, it’s all finished once you’ve gathered enough market insight but before you commit to a solution or product roadmap item.

You don’t need to write one for every minor update, but for net-new features, products, or initiatives with real scope, an MRD is worth the effort.

Create it:

After identifying a market opportunity or customer pain point
Before you define product specs, features, or user flows
During discovery or problem validation phases

It’s your way of saying: “we are doing the market research and this is worth solving.”

MRD vs PRD: What is the difference?

The MRD and PRD serve different but complementary purposes in the product development process.

The Market Requirements Document (MRD) defines what problem you're solving, who you're solving it for, and why it matters. It’s focused on market needs, customer pain points, and business opportunities. It answers the question: Is this worth building?

The Product Requirements Document (PRD) comes next. It outlines how you plan to solve the problem, with detailed features, user flows, edge cases, and functional requirements. It answers: How exactly will we build this?

In short:

MRD = Problem space
PRD = Solution space

Where the MRD fits in the product management process

The MRD sits early in the product development lifecycle, in the introduction stage — before you move into product design or testing solutions.

It’s part of the strategic groundwork and typically comes after initial market research and user research.

Here’s how it fits into a simplified flow:

Market research and discovery
Identify patterns, pains, and opportunities.
MRD creation
Distill your findings into a clear articulation of the problem and context.
Team and stakeholder alignment
Use the MRD to align cross-functional partners and product leadership.
Solution definition (PRD)
Once the problem is validated and agreed upon, you move to defining how you’ll solve it.
Design, development, launch
The solution gets built — with the MRD as a reference point for "why" this work matters.

When done well, the MRD becomes the North Star that keeps the entire team aligned as they move from fuzzy idea to launched product. It doesn’t replace product vision. Instead, it does make sure your next step is grounded in real-world need.

How to Create a Market Requirements Document

Creating a Market Requirements Document (MRD) is about clarifying what matters most before the team gets deep into solution mode. The best MRDs don’t come from isolated research or gut feeling. They’re built from conversations, data, and a clear understanding of the business context.

Here’s how to do it properly — based on real-world challenges product managers and teams face every day.

Conduct market and user research

Before writing a single sentence of your MRD, you need to get close to the problem space. This means collecting input from both qualitative and quantitative data sources:

Talk to customers, but more importantly, listen. Look beyond feature requests — ask about their workflows, pain points, workarounds, and unmet needs.
Analyze customer support tickets and sales objections. These often surface recurring frustrations or confusion.
Collaborate with Product-led Sales, Support, and Customer Success. They hear the friction daily and can point you to problems that deserve a second look.
Check product usage data. Look for drop-off points, underused features, and segments with low product adoption.
Run a competitive scan. What are others offering — and where are they falling short?

One last tip: If you're working in an enterprise environment, beware of over-indexing on your loudest customer. Your MRD should reflect patterns across the market, not one account's wishlist.

Define the market problem

This is the heart of your MRD. Your job here is to clearly state what problem exists, who’s experiencing it, and why it matters now. Avoid vague or broad statements and try to focus on specificity.

Here’s an example:

Weak: “Customers want better reporting.”
Better: “Mid-sized event organizers using manual CRM exports are spending 4–6 hours a week formatting attendance reports, causing delays in client handoffs.”

A good problem statement does three things:

Captures the user’s pain in their language
Shows the real impact on their day-to-day
Connects to a larger business or operational need

In many companies, teams feel pressure to move fast — but clarity here saves time down the line. If your product team can’t rally around the problem, you’re not ready for the solution.

Identify your target audience

You can’t build for everyone. Even if the problem is widespread, your MRD should clearly define who your primary users or customers are for this specific opportunity.

Go beyond basic personas. Include:

Industry, company size, job title, level of tech maturity
Behavioral traits — are they early adopters, process-driven, risk-averse?
Organizational context — what internal constraints or stakeholders do they deal with?

The reason why this matters is your target audience shapes not only the problem framing but also future design decisions, product messaging, product pricing, and rollout strategy.

In many B2B settings, there’s a buyer and a userThey’re not always aligned. Capture both perspectives when possible.

Map real-world use cases and scenarios

Once you’ve defined the problem and the audience, your next move is to bring it to life with concrete use cases. These aren’t optional — they help everyone from engineering to product leadership understand how the problem plays out in reality.

This step is especially critical in cross-functional environments where different teams interpret problems differently. A solid use case turns abstract pain points into relatable, scenario-based examples that make product prioritization and solution design much easier.

Think about:

Where and when the problem happens: Is it during onboarding? During end-of-month reporting? After a customer grows past a certain size?
What users are trying to do: What is their intended goal, and what obstacles get in the way?
What the current workaround looks like: Are they using Excel exports, third-party tools, or manual processes?

Example:
"An event manager finishes an event and needs to follow up with leads. Currently, she exports the attendee list from our platform, cleans it up manually in Excel, then uploads it to the company’s CRM. This process takes over an hour per event, introduces human error, and delays lead follow-up by at least 24 hours."

Use cases like this do two things:

They give product and design teams a north star for building the right solution.
They help leadership and stakeholders empathize with the end user, making alignment easier.

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Validate the opportunity

Just because a problem exists doesn’t mean it’s the right problem for your team to solve right now. This is where market sizing, strategic alignment, and timing come into play.

Your goal in this step is to confirm that solving the problem creates enough value, for users and for the business.

Here’s how to approach validation:

Estimate impact: How many users are affected? How severe is the pain? Is this a daily frustration or an occasional inconvenience?
Link to key business metrics: Will solving this drive revenue, improve retention, reduce churn, or unlock a new segment?
Prioritize based on timing: Is the problem gaining urgency due to market trends, regulations, or competitive pressure?

Validation also helps you fend off common internal blockers — like leadership asking “Why are we solving this now?” or engineering questioning whether the effort is worth the complexity.

This is also a great place to use AI. With AI tools for product managers, you can:

Analyze large volumes of qualitative feedback quickly
Identify recurring themes across interviews, reviews, or support tickets
Run trend detection across customer data sets
Benchmark against public competitor data using AI tools for business

Many of today’s AI resources are built to accelerate early discovery and validation. They save you hours of manual synthesis while still helping you reach strong, evidence-based decisions.