Prototyping and model making are an essential step in the product design and the development process in general. This is due to the fact that a prototype can help to demonstrate function and manufacturability of the product. This is especially pervalant for brand new concepts and innovated products. It can also help to ensure that the clients, designers and everyone involved in the development process, have a clear understanding of the design and function of the product.
Presentations, 3D designs and sketches are all extremely effective tools, but unlike a prototype, you're not able to see, touch or use the actual product itself. So a prototype can ensure everyone has the same vision in mind, because without one, there will likely be a misunderstanding that are seen all too often during product development.