The Warriors dropped out of the play-off places for the first time since the opening two weeks of the season after falling 31-3 at Thomand Park thanks to two tries on debut for flanker CJ Stander.
With the RaboDirect PRO12 on a three-week break for European action, up next for Glasgow is a must-win tie against French side Castres in the Heineken Cup on Friday night before they return to the league campaign with a Scotland derby against Edinburgh on December 21.
And now leap-frogged by Munster and sitting a point outside the play-off places, Townsend insists his side are going to have to bounce back to battle their way back into contention.
"The boys know that there can be no repeat," Townsend told the Glasgow Evening Times.
"I have challenged them to show that this was a blip and the only way to do that is by beating Castres on Friday night.
"That was our poorest performance of the season by a distance. We dropped off tackles and we stepped off Munster.
"The boys know that they let themselves down at Thomond and they must show character to bounce back from that.
"So it is vital that we make sure we use this as motivation to get back to a far higher level of performance and show that we're the kind of side who belongs alongside the best teams in the competition."