Optimally, how many times should the key word or phrase you are targeting for a particular page be mentioned or appear on that page?
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Our marketing team is debating how many times the key phrase on each of our web store's product pages should include the word/phrase we are trying to be competitive with. Can you advise?
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Exactly, this tool is perfect for this!
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Using the on-page report card tool helps alot. As long as you take it's advice, you should be in good condition. I use it all the time to double check my work.
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It's not so much about keyword frequency as it is about prominence and density. First and foremost, use your keywords in the most prominent locations on the page: title, alt tags, strong tags, H1 tag, URL. Then naturally use them in your content.
Density just means it should be the most used word across your site. In GWT, your keyword report shows you the words used most on your site. Your keywords should be at the top. Whether that takes 5 times per page or 50 times per page depends on how many other phrases you are using regularly, how long the page is, etc.
Key is just use it in the prominent locations and naturally incorporate them into your content. Don't use any other word or phrase more often than your keyword and you are fine as long as it is the most prominent phrase you use.
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This post by Rand should answer your question. He covers every page section:
http://www.seomoz.org/blog/perfecting-keyword-targeting-on-page-optimization
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