Yes, pick an asset allocation first. Once you have that figured out, then look at how to get to that asset allocation in the cheapest way possible given the funds available to you.
One thing you can do to squeeze the last penny of expenses out of your 401(k) is to consider putting part of your money in a target retirement fund for a very close year to satisfy your bond allocation, and then invest in the lower-fee stock fund to fill out the rest of your stock allocation. You might be a bit short on international if you do this, but it all depends on what your desired asset allocation is.