Steve Burr feels the gulf in quality and experience was evident as Tranmere Rovers completed a league double over his Chester FC team.
James Norwood netted the only goal of the game from the penalty spot on 69 minutes to secure a well deserved three points for Gary Brabin's men, who are now fourth in the National League.
The winning margin should have been greater given Tranmere's dominance over a timid Blues side, who never gained a foothold in the contest.
Michael Higdon had a header cleared off the line in the first-half while Norwood wasted a great chance and Tony Thompson denied Norwood and Jake Kirby with decent saves.
Chester mustered a couple of efforts in response, the best a James Alabi header that Scott Davies tipped wide, but the hosts never seriously tested the visitors.
Burr said afterwards: "We just lacked that quality against a side that have got quality.
"I can't fault the lads for their effort and I thought at half-time getting in at 0-0 we could get better but our passing was sloppy and in a big game maybe one or two of the young boys just froze a little bit.
"It was disappointing obviously to lose but I just felt that we were always maybe in with an opportunity to score and getting something out but I can't really have any complaints because I just didn't think we performed how we have done in the Kiddy game and the Alty game prior to that but you've got to take into consideration the opposition have got a lot of quality and a lot of experienced players who know how to deal with these types of games better than our lads."
In pictures: Match gallery from Chester's derby defeat to Tranmere
Tranmere's goal came on the counter after John Rooney had wasted a free-kick deep in opposition territory.
Adam Mekki broke free and burst into the box, drawing a challenge from Johnny Hunt, who had come on after 10 minutes for the injured Ian Sharps, and going to ground.
Bolton-based referee Ryan Johnson awarded the penalty and Norwood converted from the spot.
Hunt and his team-mates protested the defender got the ball before the man but Burr admitted it was hard to have a view from his position on the touchline.
"It was difficult to see obviously from the dugout but we wasted a good free-kick that led to that and it looked like it was a penalty to me," said Burr.
"The lads said afterwards that they felt Johnny got a touch on the ball but it was difficult from where I am to see that clearly.
"Our set-pieces were poor and it's stuff that we work on all week so when you come to matchday and you see what's served up it's disappointing.
"John's very down because if there's one player in our side that can put a good set piece in then John Rooney can but he just didn't deliver in those areas for us from corners and the free-kick that led to their penalty was a poor free-kick but there are times when he's stepped up and scored great free-kicks for us.
"We can't be too hard on the lads. They gave everything but we just lacked that little bit of nous and quality that would get us to where Tranmere are."
Read: Jim Green's verdict as the Blues are beaten at home to Tranmere
Having gone into half-time level after a dull opening 45 minutes, Burr hoped his team would improve in the second period but it was Rovers who tightened their grip on the game to record a professional if at times uninspiring success.
Burr said: "I felt the atmosphere was good and as always our fans got behind us. I said to the boys before the game that these type of games you should be grateful you're playing in because at this level you don't see it.
"I thought the atmosphere was quite good and I really felt that at half-time coming out and kicking towards our fans we could really ramp it up but they just seem to swarm the game.
"It's difficult when you're playing against players with the experience they have got you've got to move the ball quicker and we just didn't do that. We gave it away cheaply, we didn't get hold of it up front and we didn't really building anything in the middle of the park.
"We were dealt a terrible blow on 10 minutes when we lose Ian Sharps and with that we've had to rearrange the whole team.
"We stuck Sam Hughes at the back and then we've had to stick him in at right-back because we felt maybe a 4-4-2 was going to be better after we started off in a 3-4-3.
"It was one of them and those are the sort of things that you need not to happen and to lose Ian was probably the worst player we could have lost because we had to rearrange the whole team."
