http://fmwdocs.us.oracle.com/doclibs/fmw/E10285_01/appslib7/web.1111/b31974/adding_security.htm#BGBGJEAH

>>At design time, JDeveloper saves all policy store and identity store changes in a single file for the entire application. In the development environment, this is the jazn-data.xml file. After you configure the jazn-data.xml file using the editors, you can run the application in Integrated WebLogic Server and the contents of the policy store will be added to the domain-level store, the system-jazn-data.xml file, while the test users will be migrated to the embedded LDAP server that Integrated WebLogic Server uses for its identity store. The domain-level store allows you to test the security implementation by logging on as test users that you have created.<<

looks like above part did went well with me, apart from following all instruction provided in doc, I need to create users from adminconsole in security->realms->Users and Groups sections to successfully login to pages.