I want to use a BU as a test environment by connecting it to a sandbox of service cloud. And perform development and testing activities. Is it possible?
Yes, definitely possible, you will need to enable multi-org for that.
You will also need two Marketing Cloud API Users, one Service Cloud API user and on Sandbox API user.
Here is the outline of the connection:
PROD BU ---- MC PROD API User ---- Service Cloud API User
Sandbox BU ---- MC Sandbox API User ---- Sandbox API User
Read more about Multi-Org Account and User Configuration here.
Considerations for connecting to a Sandbox:
- Sandbox promotions are not possible in Marketing Cloud. Org sandboxes can be promoted into production orgs. You can't promote changes in a 'test' business unit into another 'prod' business unit.
- Sandboxes are often used for testing items that are high risk for adversely affecting accounts, such as load tests, performance tests, or volume tests. Connecting your production account to your sandbox org elevates the risk of harming your production account.
- Marketing Cloud business units are not data-isolated. Test data and production data are co-mingled when using a sandbox, which impacts data cleanliness and adds complexity to reporting, audience creation, and so on.
- All business units receive code at the same time. You can test Sales or Service Cloud changes before the release. However, Marketing Cloud changes go live at the same time, regardless of whether the business unit is tied to a Sandbox.