Keyword Research Question

Competition on the Keyword Planner is for Adwords (paid ads) not organic SERPs. It has nothing to do with ranking pages.

Yes, you should try to rank for a keyword that gets a lot of searches. Use a keyword generator to see the best long tails related to "home theaters in miami".

That could be "install theater miami" or something like "miami install theater". Check the monthly searches and check your competition to see if that's what you want to target.

That keyword planner is for bidding not for ranking on serps. You should use a keyword tool. There are plenty on the internet for a hefty price, but you can use Market Samurai for a 14 day trial and it works nicely.

Things you should look for on your keywords:

• Make sure there is enough organic traffic based on how much you would like a day. for newbies i'd say anything within the >500 clicks a month range should be really easy to rank for since nobody ranks for those(~15 a day or less)

• If you're a newbie make sure your competition is not Wikipedia in the ~1st-2nd page of SERPS (ex. you are targeting home theaters systems and wikipedia happens to have a page on the same exact thing)

• Check if you can get an exact match domain .com

• Check http://www.expireddomains.net/ to see if there's an aged site with some nice backlinks that you could register that has your long tail or at least some keywords in it.

Going with long tail is good method to have more sales, however you should use planner tool to find maximum searches per month.
Exact matching domain help you to rank better in SERP's

For a keyword planner, I use Google Suggestion/and google keyword planner.

Narrowing your reach to specific region sometimes gives you a low competition keyword which have some good amount of traffic per month.

And about the Keyword planner tool Competition Level, As Yukon Said its just a competition for advertisers to gain first page bid.

Small Tip : Go with the keyword you like , optimize your content and see results, if it is really hard to gain the top rank, don't disappoint.
"Sometimes we get top on some keywords we doesn't intended to and you can look those in webmaster tools "
Grab those and re-optimize with those to gain traffic. Keep blogging Keep Rocking

Initially long tail keywords are easy to rank well in SERPs, one or two words search queries have more competition and are difficult to rank well, it is not at all bad to go with popular searching queries but you will face competition for that, there are many keyword research tools available out there, take reference from 2-3 tools and then target your audience.

Go to Google keyword planner, type in the seed keyword, install home theater (for instance), let Google suggest other keyword.

Take the ones that best fit what you're after, stick the city name before and run them in Google planner, asking it to give you volume numbers.

Now you have some that will show some volume, some that will not.

Now you decide which are the ones that someone about to buy is going to use and which are the ones that people earlier in the buying process use.

Make a landing page for the 1st kind, use the 2nd kind for blog posts/

Don't forget the keyword + city variations.

Don't forget suburbs and neighboring cities (if within the right distance) and neighborhood names.

Though it's true that each neighborhood or suburb + keyword will give you few visitors (as compared to main city + keyword), if you do it for a dozen of them or more, you end up with some good traffic.

Write a page or a post for each keyword (or for as many as you can afford).

You'll end up ranking for your keywords without city/suburb/neighborhood too.

If your a local business, google keyword will not work well for you unless your including the city. Don't include the state name.

Long tail keywords might help to get your site traffic. Try that definitely you will get more traffic.