5 ideas to develop ABC knowledge with your pre-schooler.

1. Cut the back off a cereal box and write the alphabet on the back.  Sing the abc song together while pointing at the letters.  Then start saying a letter and getting them to point to it, and letting them pick a letter for you to point out.  You can also point out a letter and get them to name something that begins with that letter.  I usually do these activities while giving them a cuddle in their bed at bedtime.  Keep it light and fun, and don't go on too long.  If your child isn't ready for the next stage, then just go back to the previous stage for a bit longer.  Do it regularly (at least three times a week) to help it stick.  I usually use letter names because it follows on from the abc song, but also say "What sound does that letter make?"
2. Have a letter day - Choose a letter for the day and in the morning come up together with a list of activities that you might do that day beginning with that letter.  So, to choose a tricky one: "U" might lead to undressing the dolls; upside down - forward rolls etc.; undies - practise putting them on!; ugly duckling - sing it, read the story etc.; umbrella - go for a walk in the rain; under - play a game under the table; underwater - do something regarding mermaids, fish, submarines; universe - find out about planets; unload - unload the dishwasher or washing machine;  You get my picture here, U is a tricky letter and there are loads of ideas.  You then try to do as many as you can through the day.
3. Invest in some letters - whether they are the wooden blocks in a trolley type, simple wooden ones, magnetic ones or your own cut out from cardboard.  To begin with show your child three letters and name them e.g. m, g, s, then ask your child to bring you the G, the S and the M.  Once they begin to be able to do this with three letters, increase to five.  When they can confidently name the letters, then leave them all in a pile, and ask your child to e.g. "find the D for Daddy".  
4. Draw a large letter outline and get your child to trace it with their finger and say the letter (and sound).  You can then colour the letter, paint the letter, decorate the letter with glitter, make the letter shape with playdough.  Each time, you are talking about the letter and your child is relating that shape with that letter name and sound.
5. Point out letters when you are out and about.  Start with their "name letter".  While you're waiting for the bus ask them if they can spot their letter on the posters, on street signs, on shop signs - show them that letters are all around them.