When should we use a parameter when to use variable in ARM templates

I am confused about where to use a variable and where to use a parameter in ARM templates. How do we make this call ?

The referenced script uses both. I am more curious of the justification of using variables.

Reference

Sample Service Fabric Azure Deploy Script

https://raw.githubusercontent.com/azure/azure-quickstart-templates/master/service-fabric-oms/azuredeploy.json