The Baggies went two goals down at the Etihad Stadium after the opening 10 minutes thanks to the full-back's acrobatic header and Sergio Aguero's long-range effort.
Graham Dorrans pulled a goal back soon after before only for Martin Demichelis to prod home a third before the break, but Mel was heartened by West Brom's efforts for the remainder of the game.
"Conceding the goal in the third minute meant we had to change our plans," he told Sky Sports. "The players really did try in the remaining 70 minutes.
"We came across a big strong rival who are fighting for the Premier League."
It leaves West Brom two places and three points above the drop zone going into their final games against West Ham, Arsenal, Sunderland and Stoke City.
Mel feels Saturday's clash with West Ham is crucial to their survival hopes as they look to take advantage of the game in hand on the three teams immediately beneath them.
"In the next game, it truly is like a cup final," he added.
"The whole year is based on this game against West Ham."