SUMMARY The area of software product development of software intensive products has received much attention, especially in the area of requirements engineering and product management. Many companies are faced with new challenges when operating in an environment where potential requirements number in thousands or even tens of thousands, and where a product does not have a customer, but any number of customers or markets. The development organization carries not only all the costs of development, but also takes all the risks. In this environment traditional bespoke requirements engineering, together with traditional process assessment and improvement models fall short as they do not address the unique challenges of a market‐driven environment. This paper introduces the Market‐driven Requirements Engineering Process Model, aimed at enabling process improvement and process assurance for organizations faced with these new challenges. The model is also validated in the industry through three case studies where the model is used for process assessment and improvement suggestion. Initial results show that the model is appropriate for process improvement for organizations operating in a market‐driven environment. In addition, the model was designed to be light weight in terms of low cost and thus adapted not only for large organizations but suitable for small and medium enterprises as well. Copyright © 2011 John Wiley & Sons, Ltd.