Prototypes can serve a number of purposes. Here's the five primary roles a prototype can take on. Keep in mind that a prototype can take one more than one of these roles at a time.

1. As a common communication platform–using them to get everyone on the same page, avoiding misinterpretation of ideas, using them as a method to show and tell.
2. Work through a design–for designers and developers, prototypes act as a way to work through your design solution, giving you the ability to evaluate a few different options, tweak them, and come up with the best one.
3. Sell your idea internally–using them to sell your design solution to internal stake holders like senior management, other designers, or the engineering team.
4. Gauge technical feasibility–designers want to do X, but can engineering do it? Do we have the resources? Is it worth the effort?
5. As a marketing tool–while similar to number 3, this is for an external audience.