Oracle, Linux and digital marketing

In Turkey, banks and retail businesses can now get closer to their customers using Paro, the country's first real-time digital marketing service for targeted intelligence about consumer buying habits.

Since Tani Marketing and Communication Services--Istanbul-based specialists in using marketing channels to reach consumers--launched Paro in January 2003, more than 100 of the country's leading businesses have signed up for the service.

Paro generates personalized incentives and discounts designed to encourage customer loyalty. Consumers may register to receive Paro promotions with the swipe of a credit or debit card at 5,000 ParoPODs located at points of sale in banks, supermarkets, hotels, gas stations, restaurants, and other retail businesses.

Each time the customer of a Paro subscriber makes a purchase, the transaction data is electronically transmitted to Paro's database. Paro, which owns the customer data, transmits information relevant to the sale of particular products or services to its member retailers, who use this information to learn about each consumer's shopping patterns and offer individualized discounts and incentives on future purchases.

Merchants can also instruct Paro to make instant offers to customers at the point of sale through ParoPOD, a 10-inch screen device and a thermal printer that faces the consumer. Incentives could be an immediate discount on the goods being purchased or a reduced price if the customer purchases additional items as part of the same transaction.

'Paro's dynamic system of profiling each customer guarantees a high return for merchants through a detailed understanding of each customer's buying behavior,' said Engin Oytac, vice president of marketing and sales at Tani. 'It maximizes cross-marketing and revenue-generating opportunities without requiring a technology investment from participating businesses, and it turns customer knowledge into competitive advantage.'

Paro's revenue is set to grow by 50% during 2004, and by 25% to 30% annually through 2009. Paro's business intelligence solution is built on Oracle Database with Real Application Clusters and Oracle Application Server (OracleAS).

High-Level Project Goals

- Roll out scalable, reliable digital marketing infrastructure
- Achieve highest performance at lowest cost
- Manage rapidly growing data volumes without increasing overheads
- Implement sophisticated analytical and data mining capabilities
- Develop and execute highly targeted end-user campaigns
- Make the technology available at all retail outlets in Turkey
- Extend the concept to Western Europe and the United States

Why Oracle?

Tani selected Oracle for its scalable, high-performance technology, the expertise of its consultants, and its support for Red Hat Linux.

'Oracle is the leading database provider in Turkey and was the first supplier to deliver a high performance internet platform and integrated applications,' said Mehmet Ali Neyzi, general manager at Tani

'Oracle's consistent development path and commitment to developing and supporting its products ensures that our infrastructure can be upgraded as more merchants and consumers join Paro.'

Tani also wanted the assurance of support before, during, and after implementation. 'Oracle Turkey provided local support at every stage, from scoping our requirements to technical expertise and assistance with implementation,' said Tugrul Fadillioglu, vice president of technology and operations at Tani.

'Another factor in our decision was Oracle's working relationship with Red Hat. This allows us to take full advantage of the cost benefits and processing power of open source software knowing that Oracle will support the entire system, not just its own components.'

Poised to Save Thousands of Dollars Per Hour
Oracle Certified Partner KocSistem, an IT consulting company, implemented Paro's transaction database with assistance from Oracle Consulting, in time for Paro's launch in January 2003.

To ensure that all its data is backed up, Tani runs Oracle Real Application Clusters on four Sun Solaris servers. In the event of hardware failure, Oracle Real Application Clusters automatically fails over to ensure that customer information flows between the ParoPODs and the transactional database with no interruption or loss of performance.

'Availability is our top priority,' Oytaç said. 'Paro is a new marketing concept and any performance or availability issues would adversely affect market penetration and harm our brand image. Downtime could cost merchants the equivalent of thousands of U.S. dollars per hour in lost sales opportunities.'

Reduces Growth Pains

Tani manages 3 terabytes of data in its transactional warehouse and expects this volume to increase by 50% the first year and up to 30% per annum in the following five years. The pay-as-you-grow scalability of Oracle Real Application Clusters allows Tani to add servers to its cluster for increased computing power as its business expands and to increase reliability at the same time.

'In addition to the immediate gains, OracleAS provides centralized location to develop the Paro application,' said Fadillioglu.

'Its fast, scalable developer-friendly Java2 Enterprise Edition (J2EE) containers allow Tani's developers to build and deploy Java applications easily, without the need to hire external consultants. Sharing features and processes of applications across the system delivers savings to the bottom line by cutting development time. The clustered OracleAS instances provide a high performing server farm that eliminates single point of failure.'

Tani develops its applications using JDeveloper, and its own tests have proven that OracleAS scales with zero application changes. Tani uses two Sun Servers, each with two CPUs, for its OracleAS system, and each application server handles an average of 250 requests in a second. The company expects to add four more Sun Servers within two years to cover the increase in clients.

Data Warehouse on Linux

Paro intends to provide even more sophisticated customer segmentation and profiling to affiliated merchants when its new data warehouse goes live in 2004.

Built on another instance of Oracle Real Application Clusters and using Oracle Warehouse Builder, the warehouse seamlessly integrates with Tani's transactional database to deliver rapid online analytical processing and data mining of customer information.

To build on that, Paro will use Oracle Reports and Oracle Discoverer to provide integrated querying and reporting. The data warehouse will run on a cluster of two HP Itanium 2 servers on Red Hat Linux to ensure maximum reliability and scalability at the lowest cost of ownership.

'Oracle Warehouse Builder's intuitive, wizard-driven graphical interface helped speed design and implementation of our data warehouse,' Fadillioglu said. 'It delivers significant performance advantages for extracting and loading data and ongoing maintenance.'

Building its data warehouse on Linux opens opportunities for Tani to run the system on less expensive hardware and enjoy lower support costs, without sacrificing availability and reliability.

'Ours is the largest Linux implementation in Turkey Fadillioglu said. 'Now that Oracle supports Linux, it is fast becoming a mainstream operating system.'

Transforming Data into Revenue

Oracle Database comes with a range of integrated business intelligence capabilities that allow Tani to provide concise, focused intelligence to merchants and predict likely future buying habits.

Sales figures for individual products can be analyzed weekly or daily for each region of Turkey. In addition, the sales figures can be compared with figures for previous years and linked to factors such as weather or the economy that influence buying patterns.

Tani uses Oracle Reports and Oracle Discoverer to query information in its data warehouse and extract timely and accurate data for its customers' requirements and to support its own strategic planning. Said Oytac:

'Oracle Reports is a powerful tool that gives us a fast track to the data we need regularly plus the ability to publish it in any format our merchants request. Oracle Discoverer lets our executives make ad hoc queries as they need to. Both are invaluable tools for making decisions.'

Tani will combine the sophisticated knowledge extraction and management capabilities of Oracle Data Warehouse with Oracle Marketing Online (OMO), a component of Oracle E-Business Suite, to help affiliated merchants cross- and up-sell to consumers. OMO automates each step, from the initial analysis to campaign planning, list creation, budget management, multichannel fulfillment, and post-campaign analysis.

OMO allows Tani's staff to design marketing campaigns based on customer data from the data warehouse. Key metrics such as average response rates per product, are available online to Tani users, who generate reports for each individual campaign and sales linked directly to the campaign that generated it. Greater insight into sales patterns will allow Tani's marketing staff to continually refine campaigns and to guide merchants on cross- and up-selling strategies.

'Oracle Marketing Online will maximize the revenue we generate from the customer data we collect and analyze in the data warehouse,' Oytac said.

'At the same time, our merchants will be able to communicate with customers on a truly one-to-one basis, increasing their sales. The information we pass on through out portal environment will allow merchants to analyze their customers' purchasing profiles with greater sophistication and make smarter marketing decisions.'

44% Success Rate for Beer Producer

A major beer producer commissioned a campaign through Paro that generated a 44% consumer response rate. Paro identified beer drinkers who were not currently purchasing the brand and offered them free beer through ParoPOD.

The consumers then selected the beer from the supermarket shelf. At the point of sale, Paro recognized the consumer and provided the discount in real-time.

Those consumers who had who taken the free beer offer were offered two free bottles during their next store visit if they purchased a six-pack. Forty-four percent of the targeted group purchased the six-pack and got their two free beers, receiving the discount at the point of sale.

Future Plans

Tani plans to expand the number of affiliated merchants and to install ParoPODs in all retail outlets in Turkey. The company also plans to replicate its digital marketing model in Western Europe and the United States using Oracle technology.