Its a pretty involved process to do it right. You need to make sure that you set the Type to Preset > Materials for each of the actual Material files, and you also need to make sure you set the Compatibility to the right mesh. in this picture I highlighted where you need to set the Type, and the Compatibility

And you also need to make sure you set the Categories. If you miss one of these, it won't show up or it won't show up where you want it.