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Creating Hierarchical Territories

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I'd like to be able to set up hierarchical territories whereby a country/state is part of a territory and a territory is part of a region.  I'd like both fields to be auto-set based on the country or state in the address, which I think I can do via a workflow.  I know I could just create custom fields within accounts/contacts but I'd like to potentially leverage the territories functionality as I believe we can set targets for each territory and subsequently regions.  

Is there a way to easily do this?  It seems like something that should be pretty straight forward and although I did a search, couldn't find a comprehensive answer.

Thanks in advance.


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