Overview of Keyword Research and Completing Your "Keyword Pyramid"
Keyword or search term research has three primary components: The first is "building a list of keywords" people use when searching. The second is "ranking each keyword" on your list based on Volume (how many searches per month) and Competitiveness (how many other sites fit the search term). The last thing is to "target the primary keyword phrase" which will be at the center of your campaign (i.e. the top of your Keyword Pyramid)

Timetable: Day 1

Come up with one phrase of 2 or 3 "primary keywords" which best describes your site. One way is to manually type a query into search engine of a good descriptive keyword related to your product (eg. if you're a "shopping cart software provider" you might type in "Shopping Cart Software". Study the sites that come up in the results and examine their meta-tags and content to amass a master keyword list. (A more efficient method is to use use keyword software (http://www.seotimetable.com/index.php?section=articles_zoom&TAG=Keyword_Pyramid) to find variations of keywords that stem from "Shopping Cart Software" (e.g. terms like "Discount Shopping Cart" or "Online Shopping Cart Software")

To select your most desired 2-3 keyword phrase which you will place at the top of your keyword pyramid, you want to use the 2-3 keywords that are returning the highest monthly search counts or use the 2 or 3 words that are the most popular search queries for your type of site.

For each individual page on your site you will want to have page specific "primary, secondary, and complementary keyword phrases" which will appear in the h1, h2, and h3 tags. "Shopping Cart Software" might yield keyword phrases such as: Ecommerce Software Ecommerce, Shopping Cart Software and Online Shopping Cart Software.

To expand your keyword list, evaluate websites on Google or Yahoo targeting similar keywords from your list. Check how many incoming links each page has to rank popularity. MSN & Yahoo are more accurate. You can also view competitors' web sites source code for keywords in the Resource Page or (Link exchange page) Meta data in header in Title tag, description Body (Header (h1, h2, h3) tags, Body copy, copyright).

Another method of revealing profitable keywords is to actually run a PPC (pay-per-click) campaign on Google or Yahoo for just a few keywords. Once you measure the conversion rates of each keyword on your site, it will help you determine which keywords are the most important to obtain rankings for. Plus, it will give you some guidance on what to expect in terms of conversion once you finally obtain natural search engine traffic for those keywords.