Using a country in your keywords

[Ali31]

My company has recently started offering services in South Africa - which is great - same language - lot of potential there. But I suspect our keyword research is suffering from "thinking like a foreigner". i.e. "buy cars South Africa" rather than "buy cars".

Wouldn't google.co.za naturally assume:

1) Anyone using their service for "buy cars" is looking for "buy cars South Africa" (I know it's more complicated - Google will give different results the more it can figure out about your location)

2) That any co.za site optimised for "buy cars" is automatically 90% optimised for "buy cars South Africa" too - so isn't a productive long tail query (against something like “buy sports cars”)

I appreciate that some companies will be TARGETING foreign browsers (i.e. holiday accommodation South Africa) so will need to explicitly optimise their on-site for the country for “foreign search engines”. But I'm asking about companies in South Africa targeting people from South Africa.

[NakulGoyal]

In this case, I'd ask you, is your domain .za ? Is it hosted in South Africa ? Does it make sense to do either of these ?