Choose a short passage or story that contains characters, plot and setting. Have students read the passage before analyzing it in groups or individually. Ask them to pick out who is in the story and when and where it is taking place. Draw a diagram with three circles labeled "beginning," "middle" and "end." Have students place the story within the diagram and discuss the plot.
Retelling a story in different words and from memory can help when trying to understand characters, plot and setting. Break students up into groups and have them read a short story. Get them to pick out the three parts of a story. Then have them create a short summary in their own words. Each group should share their summary with the class, which can briefly identify all three parts to see if it matches the group's interpretation.
Graphing the elements of a story or novel as the students are reading it is an informative way to teach as you go. Have students start with side-by-side boxes labeled "characters" and "setting." A box below can be labeled "plot." As the class reads the story, have them fill in the boxes anytime something seems to fit. At the end of the story or novel, see if their graphs match. Discuss the three elements and how they helped with understanding the story.
Students can tell their favorite fairytale considering the three parts of the story -- setting, character and plot. The students can take turns presenting the parts of their chosen story to the rest of the class without naming it, beginning with setting. See how quickly the class can guess which fairytale is being discussed.