My neices were the very same way. My youngest is four and she know the alphabet but doesn't recognize the letters because she finds interest in something else.
Music is the way to a child's heart. I wrote her a little song, and made big letters on a sheets of posterboard and gather household items that cordinate with each letter i.e. an apple of a crayon.
'A is for apples they grow on trees.'
She'll hold the apple.
'B is for the busy buzzing bees.'
She has a bumblebee antennae band from an old halloween costume.
'C is for my crayons, I used today.'
We'll hold up crayons.
'D is for my dollies, that like to play.'
She'll grab her dollbaby.
I line the items up on the kitchen floor and i stand in front of the items facing her on the other side. As I move on she moves on looking at the letter, possibly a picture, and she picks up the object. After a couple of days she could sing the song and pount out which item started with which letter.
It's a really fun activity and not only does it keep their attention but they see how the alphabet is a big art of what they do.