The search engine optimization process can sometimes be mistaken for a singular, sprint-to-the-finish project, when in fact, it's more like a marathon. Searchers rarely ever convert on the first click and thus, SEO campaigns that merely target a few popular keywords and call the task finished may be fooling themselves. I made this handy chart to help illustrate the issue:

In my example, the hotel could miss out on dramatic opportunities for optimizing the path of discovery, investigation, brand research and conversion rate optimization by simply targeting "dubrovnik hotels" and ignoring the rest of the process. A comprehensive Internet marketer is going to approach this problem the same way a user approaches the process - by delivering value in every step of the chain.

I like to think of the SEO campaign process in a format like this:

1. Generic Research: It's very possible that, particularly for smaller brands and sites, you don't have the ability to compete for these lofy, high-level, hyper-competitive keywords. However, there's no reason you can't be listed among the references on the ever-present Wikipedia page on the subject, mentioned in a review or blog post, covered by a press publication/article or included in a directory/list of resources. If nothing else, you might consider buying ad space from the pages that rank atop the results - especially in today's market, buying CPM ads can be even cheaper than paying the engines through PPC.
2. Niche Research: This is often the first opportunity you'll have to rank, but only if you don't ignore the indirectly relevant (though sometimes less obvious) keywords in the discovery process. Put yourself in a customer's shoes (or, better yet, talk to lots of customers and hear how they've done this), find the achievable keywords one step above your direct acquisition channel and get to work on some great content that can earn a spot in the top 5-10 listings.
3. Brand Discovery: This is the classic, SEO-as-a-tactic process. Research the most relevant, highly-converting phrases, analyze the competitive landscape and find ways to build the content and earn the links necessary to rank.
4. Brand Investigation: The battle isn't won until the visitor converts. Make sure that when obvious queries about your product/brand/company's value arise, you're aware of the results and pro-actively influencing the content. Sometimes it's enough to simply provide excellent service and take note of the few criticisms that arise. In other cases, you may need to conduct SEO reputation management campaigns to help surface the good and push down the bad.
5. Brand Navigation: Although this should be the easiest query to win, it presents opportunities for further optimization. Controlling and carefullly choosing Sitelinks under your listing, watching the results in the top 5 carefully and even investing in paid search on branded terms (research has shown that combining paid + organic listings boosts the CTR & conversion rate of both - source needed if anyone in the comments can find that)
6. Purchase: Queries like "discount code" "coupon code" "special offers" etc. are common, particularly for anyone selling directly over the web. It's up to you to decide how and if you want to distribute these for your savvier and more cost-conscious purchasers, but in campaigns I've observed, it appears to more than make up for the "savings" with improved conversions.
7. Evaluation: Surfacing all of the content a visitor may be interested in about your product is wise and it can be very smart to do keyword research in the long tail around terms that follow your brand or product (so you can be sure to show up as the default resource before competitors or review sites, whose accuracy and motivation may be questionable).

I don't want to overly-complicate the SEO process, but if you're ignoring important steps in your customers' search path, you could be missing huge opportunities.