Silvery - 9:26 pm on May 19, 2010 (gmt 0)
Catalyst is right - jamming extra keywords into fields within your Google account page could result in penalization. Business name in the name field and category name in the category field -- don't force in the city name into a place where it shouldn't be.
However, on your own website, you might consider carefully forming the homepage Title to contain the name of the city -- this can help and is not considered a bad practice. Example format:
"Business Name - Category in City Name"
Using this format, a business named "Acme" which does "Auto Repair" in "Chicago" might have an HTML title on their homepage like:
"Acme - Auto Repair Shop in Chicago, IL"
However, for improved rankings, your business needs to appear more popular than the businesses which currently rank higher than you. So, your business needs to be mentioned in places like yellow pages, newspapers, press releases, blog posts, twitter, etc. This is why I suggested that you should look to do promotional activities to improve your company's online visibility.