An effective keyword research process is considered as the first step to a successful SEO campaign as it governs the revenue as well as the investment, thus being a major factor affecting the ROI.

Keyword Research requires a number of factors be considered including the business model and the demographics of the target audience.

For instance:
If you are a Ford Dealer in London, a good keyword may be "Ford Dealers London" or "Ford Car Dealers London".

Some of the commonly used tools for keyword research include Overture Inventory, Google Keyword Tool (a.k.a. Google Suggest) and Word Tracker. These tools help you study the search pattern for a set of key phrases and help in opting for the right keywords.

Although it can be tempting to choose the most traffic attracting key phrases, however, due care needs to be paid to ensure that the keywords are relevant to the business model and pose a realistically achievable target.

A good strategy might be to divide the SEM/SEO campaign into phases and iteratively perform keyword research before the start of each phase.

Finally, it might be a good idea to hire a keyword research expert or an expert SEO/SEM consultant to help with the keyword research for your website.