Selecting the faces you want to apply the material to, and dragging the material over to the selected faces/assigning the material to the selection would also do the same thing. It automatically groups those selected faces under the same material ID :)
Just a quick addition to this, you don't have to keep applying/re-applying the material modifier. When you are in polygonal selection mode you will see a rollout for Polygon: Material ID's in your Command Panel, and from there you can select your polygons and set the ID's without having to collapse, re-add, collapse,…
This tutorial is covering, how can you use multiple materials on one mesh in 3dsMax/UDK. The theory is simple, we will assign different material ID's to the mesh for different materials/textures.Lets try it with a simple box. After you made the box, open up the material editor, and click to "Standard" Then select…