With the increasing number of Internet of Things (IoT) devices, a huge amount of latency-sensitive and computation-intensive IoT applications have been injected into the network. Deploying mobile edge computing (MEC) servers in cloud radio access network (C-RAN) is a promising candidate, which brings a number of critical IoT applications to the edge network, to reduce the heavy traffic load and the end-to-end latency. The MEC server's deployment mechanism is highly related to the user allocation. Therefore, in this paper, we study hierarchical deployment of MEC servers and user allocation problem. We first formulate the problem as a mixed integer nonlinear programming (MINLP) model to minimize the deployment cost and average latency. In terms of the MINLP model, we then propose an enumeration algorithm and approximate algorithm based on the improved entropy weight and TOPSIS methods. Numerical results show that the proposed algorithms can reduce the total cost, and the approximate algorithm has lower total cost comparing the heaviest-location first and the latency-based algorithms.