A material type must be entered for reference material &

What causes this issue?

You have not yet assigned a material type to the material group
reference material. The material type is required later, to control the
screen sequence when you use the reference material later on in the
material master, for example.

How can this happen?

You use a different material type for fashion materials than for
perishables. This ensures that the respective maintenance screens and
entry processes suit the type of material being created.

How to fix this error?

Allocate the reference material a material type which is suitable for
the majority of the materials in this material group.

Error message extract from SAP system. Copyright SAP SE.