A Market Evaluation is analyzing your market space then identifying your ideal customer. "Market" is a term to reflect individuals in your space before analyzing and qualifying.
For example, a Heating & Air Conditioning Company in Cincinnati, OH would start with the city of Cincinnati (or a suburb) then determine additional criteria:
Depending on the size of your company and your goals (increase existing customer interactions, expand customer base beyond its current geography, create a new service plan, etc.) will determine your market and target audience. Once identified, determining where you should spend time and marketing dollars is easier and helps with strategy development.