Your product roadmap describes the products that you intend to develop and bring to market over time. Each product on the roadmap needs a Market Requirements Document (MRD) to define for whom the product exists, what it must do, and how well it must perform to capture customers and make a profit. The MRD defines what the organization must do to produce a winning product.
Unfortunately, the MRD is dismissed as some irrelevant puffery produced by the marketing department in some organizations. Clues that yours may be one of these organizations would include hearing sentiments like:
“I don’t know why we need an MRD. What really matters is the engineering development plan.”
“Just give me the product specs. I don’t care about all that marketing fluff.”
“Why do I have to sign this?”
“We should just combine the MRD and the engineering development plan to save time.”
These sentiments signal a failure to recognize that the MRD guides the organization to make robust decisions about which products to develop. However, for the MRD to do its job, authors must structure it to support decision-making.
A Business Case Married to Product Requirements
At the highest level, you need two things to define a winning product. You need a business case to define the win, and you need a set of requirements to define the product. An MRD is the marriage of these. See the figure below.
The business case will be built on assumptions regarding the proposed product’s revenue timing, competitiveness, and profitability. All three of these business-case elements are directly connected to product requirements. Revenue timing is driven by product readiness timing. The product’s performance drives competitiveness. And profitability is in part driven by product cost. It follows then that an MRD’s business case and product requirements cannot be separated.
Furthermore, you also do not want to approve MRD’s business case and product requirements separately. You cannot approve one without knowing the other. That would be like agreeing to buy something before you know how much it will cost, when you’ll get it, and what it will be capable of when you do get it. Furthermore, revisions to the business case or product requirements can drive revisions to the other. If you are managing and approving them separately, you’ll lose that connection.
The Business Case
An MRD’s business case needs to help management decide whether to pursue your new product recommendation. To make that decision, they need to know
- If the opportunity is real
- If they can win, and
- If it’s worth it.
This real-win-worth analysis allows management to evaluate your recommendation’s risks and potential. The table of contents for an MRD’s business case in the table below is designed to enable this analysis.
|Real-Win-Worth Element||MRD Business-Case Section|
|Win||Vision for Unique value|
In the table below, you’ll find the key questions that must be answered in each business case section.
|Business Case||Key Question Answered|
|Objective||What are your market share targets?|
What are your revenue and gross margin targets?
When will they be achieved?
|Opportunity||What market are you targeting?|
What are the growth drivers?
Who are the most important customers in your target market?
What is the total available market forecast?
What is the target market’s unmet need?
What are the application requirements?
What are the customers’ primary selection criteria and value drivers?
|Competitive Landscape||Who are the competitors?|
What are their product offerings and strategy?
How do their current product offerings and strategy compare to your current offerings?
How do your current product offerings compare to competitors’ offerings in the future?
|Vision for Unique Value||What is the new product’s unique value proposition?|
What positions will you take?
What is the product’s target price?
How will your new product compare to competitors’ offering at the time of introduction?
|Potential Returns||What financial gain is possible if the new product is pursued?|
The second section of your MRD describes the product requirements that will satisfy the business case. Product requirements are determined by coupling market requirements and your vision for unique value. Market requirements are those things that your product must do to address the customer’s use case. Your vision for unique value identifies those things you intend to do better than the competition to win your target customer’s business. See the figure below.
See the table below for a detailed outline of the product requirements section of an MRD.
|Product Requirements||Key Questions Answered|
|Timing||When is the product required in the market to hit the business case objectives?|
What interim milestones must be hit to support pre-launch marketing activity?
|Platforms||Which product platform(s) must be used from an external perspective?|
Which common components and interfaces with other products must be used from an external perspective?
|Installed-Base Upgrades||What elements of the new product must be made available to the previous generation installed base?|
What are the performance and cost targets for each of these?
|Performance Verification||How does the new product need to be tested to reflect usage in the customers’ environment?|
What data needs to be collected?
|Performance||What are targets for those specifications that must exceed competitive benchmarks to achieve your vision for value and competitive advantage?|
What are the target specifications for everything else?
|Cost||How much does the product need to cost to achieve profitability targets described in the business case?|
What are the configuration assumptions for the cost requirements?