For now as Ganesh described You need to use the JSON formatting based on conditions and updating the styles of the component. As online is tagged I am guessing we should talk only about this version.
Please be aware You can modify this styles of a column -> Use column formatting to customize SharePoint - styles
so for Your needs this kind of example:
{
"$schema": "https://developer.microsoft.com/json-schemas/sp/v2/column-formatting.schema.json",
"elmType": "div",
"txtContent": "@currentField",
"style": {
"background-color": "=if(@currentField == 'A', '#2BBBAD', if(@currentField == 'B', '#4285F4', if(@currentField == 'C', '#aa66cc', if(@currentField == 'D', '#bbdefb', if(@currentField == 'E', '#cddc39', '' )))))"
}
}
will produce this kind of result 
This is all already explained in Ganesh answer. What is worth mentioning is that in the near future there will be added a UI for this kind of column and list view formatting so keep an eye for updates :). This kind of feature was already introduced in this month PnP Community Call
Please check this:
https://www.youtube.com/watch?v=JCKnWl0HFiA&feature=youtu.be&t=1414
I am looking forward for this to finally show in online :)