Firms use a differentiated targeting strategy because it is better than focusing on individual or small groups of potential customers. most market segments are too small to be profitable. it is easier than mass marketing. banks are more willing to extend credit to companies with this strategic approach. it helps obtain a bigger share of the market.

Differentiated strategy is helpful to get bigger shares of the market. Hence, the firms are generally used this strategy. Therefore, 2nd option is correct and remaining options are incorrect.

Differentiated strategy:

It's an approach that a business takes to develop a unique product or service that customers will find better than or in another way distinctive from products or services offered by competitors.
Differentiation strategy is a way for a business to distinguish itself from the competition.
If successful, it allows the business the opportunity to charge a premium for the good or service. Keep in mind, however, that the business often encounters higher costs to offer the unique product or service and thus, needs to be successful in attracting customers to cover that extra cost.
The company will be able to obtain a bigger share of the market.