Hi! When you are on the screen that asks you to pick a disk to install to, look at the top of the screen and choose "Disk Utility" from one of the pull-down menus. When Disk Utility loads, you should see your hard drive represented on the left side of the screen. Select it, and choose the option to erase and format the drive. Then, when you exit Disk Utility, it should show the drive in the box as an option to install the OS to.
The problem is that store-bought drives are not in the format necessary to be seen by a Mac, and they therefore do not show up initially without being formatted.
Thanks, and let us know if that does not solve the problem.