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A survey is  a set of carefully planned questions that are used to gather data
Basically: Questions to get certain information

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Test marketing is the process of putting marketing variations in front of customers as a business experiment. It is extremely common practice that is use to innovate by trying a large number of ideas in the field.

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Sales records provide data about popularity of products or lines, show seasonal changes in sales, provide data on stock, and predict future sales and inventory levels.
A business's internal information sources can provide a wealth of data for researches.
Internal data is data retrieved from inside the company to make decisions for successful operations. There are four different areas a company can gather internal data from: sales, finance, marketing, and human resources. Internal sales data is collected to determine revenue, profit, and the bottom line.

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Easy to gather data
Easy to make
Very convenient

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Advantages:
- Get direct, honest answers
- More thought put into answers
- Investigate behavior
Disadvantages:
- Time consuming
- Smaller group of people
- Expense
- Difficult to manage

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Observation is the method of viewing and recording the actions and behaviors of participants. It is described as being a systematic observation method, which implies that the observation techniques are sensible and replicable procedures so that the research could be reproduced

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Companies can develop databases that provide personal data and purchasing records for every customer they serve. This information can be used to target previous buyers with sales promotions and advertising.
For example, a menswear store that record sales and demographic data for customers on their birthday might send a tie to the store's best cusomers on their birthday.
Internal information sources could keep these customers coming back for more with these litte things.

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The video about internal information sources
https://youtu.be/fCfEIvCmDGo

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- most common and simplest data collection method
- Useful for Framing Hypothesis
-Greater Accuracy

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Observations can be more accurate and less biased than surveys.
Very effective for small amounts of people, because you in-depth analyze every individual.

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Might not be answered appropriately
Might not account for some
Limited set of answers
Inconvenience to time

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The method of observation should not be obvious to the participant. A common method of mechanical observations is the bar code scanner used in supermarkets. The scanners record the types and quantities of products purchased, the time of purchase, the method of payment and whether coupons were used. if the customer uses a frequent shopper card or other form of electronic identification at the checkout then researchers can make consumer profiles

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Selling procures and services on a limited bass before a full product launch. Example: A donut shop that tries 50 new donuts in two locations each to decide which to launch on a nationwide basis.

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More expensive and time consuming than other research methods
Less effective in large groups because it is harder to observe large amounts of people, and because individuals tend to copy others

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World Market Intelligence covers more than 75,000 of the world’s leading companies and organizations and provides SWOT analyses for the top 10,000. It also reports quarterly and annual company financials.

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a small group of people brought together to discuss a particular product or problem. It usually combines some features of an interview but also of observation methods of collecting data.

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Mod•U: Powerful Concepts in Social Science

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How Focus Groups Can Help Your Research: Qualitative Research Methods

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Client cards, reward programs and other buyer clubs benefit both the consumer and marketing

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Schools (ex. Philip Pocock)
Fast Food (ex. Burger King)
Video Advertisements (ex. YouTube)

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Changes that are introduced as a pilot. For example, a restaurant that introduces a no tipping policy together with a incentive program for employees to earn bonuses when customers are satisfied.

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Businesses use data mining to determine relationships between personal information and purchasing behaviour for specific consumers.
Data mining is used by marketers to look for unknown connections and patterns among collected data and to gain useful information.
For example, it can tell you how many customers have purchased greater than $25 worth of a product in the last three months, were female.

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Fast food restaurants are well known to research by test marketing. A company  such as KFC has changed their double down sandwich, so instead of bread, they give you two pieces of fried chicken, which hold the contents of the sandwich. This change was only introduced in some states, before it was eventually changed for the rest of the country.

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Distributions experiments such as entering a new region or country on a trial basis.

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well known company that uses this method

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well known company that uses this method

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Disney
Disney has and established focused groups directed to kids. The group is called a "kid-centric" focus group.

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Experimenting with pricing structures ad strategies such as a telecom company that introduces flat pricing in one city to measure the impact on demand.

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What is internal informantion source? (Image)

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What is internal informantion source? (Image)

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The risk of failure of the product is minimized. The marketers get a good exposure of marketing environment in order to measure the performance of the sales

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Promotional experiments such as testing variations of an advertisement on a limited basis before a major campaign.

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ability to provide a user with the information needed to do any task effectively and efficiently.

Advantage: Expenses

Hiring external firms for marketing research may be more expensive than using corporate employees. Costs, expenses and resources can be tightly monitored and controlled when an in-house staff conducts investigations.

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Brand related tests such as releasing a new logo variation to see if it impacts brand recognition.

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Resources
Geographic Limitations
External marketing research firms may have access to proprietary software, research pools and expert analysis not available within the company. These firms employ doctorate-level experts for statistical analysis, survey preparation and research analysis in addition to maintaining a large roster of customer research pools. Limited resources and employee knowledge gaps may hamper the effectiveness and thoroughness of in-house research efforts.

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https://www.swagbucks.com/content/projects/surveys/logged-out/info_whyTakeOnlineSurveys.png

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There really aren't any disadvantages to test marketing, if the product doesn't perform well, it doesn't affect the brand as it was only showcased in remote locations.