Many older sources of instructions for installing the reference site for Sitecore Commerce powered by Microsoft Dynamics mention the use of a PUP package to create a Commerce site.
After downloading and extracting the 8.1 version of the site from GitHub there is no "pup" folder located under the \SCpbMD\Database folder.
To resolve the issue, use the PowerShell scripts available in the Sitecore website directory to create a Commerce site:
Initialize-CSSite
Further information is available in the latest SCpbMD Reference Storefront Setup Guide available on the Sitecore developer portal.