What does a value proposition explain?

A value proposition articulates the unique benefits and value that a product or service provides to its customers, specifically focusing on how it addresses their needs or solves particular problems. In essence, it clarifies the reasons why a customer should choose that product or service over alternatives. This aligns closely with the correct answer, which emphasizes the problem-solving aspect for customers, helping them understand the advantages and importance of the offering in their lives.

The other options do not capture the essence of a value proposition. Merely discussing how a product increases production costs does not relate to customer benefits. Describing demographic information pertains to marketing strategies rather than defining value. Finally, discussing digital marketing channels focuses on the methods of promotion rather than the intrinsic value provided to the customer. Thus, the correct answer encapsulates the core function of a value proposition effectively.