Google ignores extended characters

Differences in SERPs with Keywords with or without extended characters

[selomelo]

I hope that this time I could manage to have this message posted. I really need some help.

Before stating my problem, please let me clarify the issue, and explain this google-specific phenomenon by way of example (not the actual keywords)
Search google for "face value" = 3,060,000
Search google for "façe value" = 3,060,000
Or
Search google for "üniversal" = 69,000,000
Search google for "universal" = 69,000,000

This means that Google ignores extended characters and substitutes them by some near-latin equivalents, such as "ç" by "c;" "ü" by "u," etc.

This feature is peculiar to google, and is not observed in other search engines like Yahoo or MSN.

Now the problem:

I have a small site in English with a few pages offering some language related services.
The curious thing with Google is that, when kw1 + kw2 searched, my site appears down somewhere on page 40 or below.
But when I use some extended characters (such as "ç,ö,ü" in either kw1 or kw2, then my site appears on page 1 at #1 or #2. I noticed this when I observed that I receive visitors from local markets who typed kw1 or kw2 with an extended character in it.

And my question: Why should this huge difference in SERPs occur depending on kw with or without an extended character knowing that any of pages at mysite does not contain even a single typo (extended character)? When I use "üniversal" (not the actual kw), I am #1 but when I use "universal," I am #400+.

I need some expert opinion, and would like to thank in advance for all your valuable suggestions.
Selomelo